Pres. Franklin Delano Roosevelt: Economic Bill of Rights

From his State of the Union Speech 11 January 1944:

"This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.

As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.”  People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.

Among these are:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.

America's own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for all our citizens.

For unless there is security here at home there cannot be lasting peace in the world."

During the debates on the (first) Bill of Rights, Thomas Jefferson had wanted to include 'freedom from monopoly' among them, but had been voted down, most likely by those who wished to one day have a monopoly.

Birth and State

No religious group or denomination should ever be allowed veto power over the laws and regulations of the federal government of the United States nor of any state or municipality therein.  Yet this is exactly what the very vocal opponents of the Obama administration’s recent changes to regulations for employee health coverage propose.  They may as well propose changes to the composition of Congress restoring the First Estate. 

Of course, this would directly violate the First Amendment to the Constitution prohibition against the establishment of religion in the worst way possible, and the only way for such an action to stand would be to amend the Constitution yet again.  Such a change would never pass.  What the administration’s opponents in this matter are suggesting amounts to an attempt to do so through the backdoor.

I am writing, of course, about the administration’s change to the rules requiring employers’ health plans to cover birth control contraceptives.  To do so in no way forces Catholics who follow the superstitious medieval rules of the Church to make use of such an abomination in their eyes.  It merely puts religious facilities offering other than purely religious services on the same level as their more secular counterparts.  The Fourteenth Amendment calls that “equal protection under the law”; exempting Catholic employers from the new rules would deny that to those counterparts.

The proposition that the United States of America was founded as a Christian Nation is a lie, no matter how widespread and fervently believed.  The so-called Founding Fathers did not see themselves founding a vanguard of post-Reformation Protestant Christianity but a new kind of Republic based on the ideals of the Enlightenment. 

With a small minority in dissent, they made their new Nation thoroughly secular.  They saw the national capital not as a New Jerusalem but as a New Rome.  They chose an area with seven hills named Rome, Virginia, with a river named Tiber running through it in which to build the new city.  The Mall in Washington City mimicked the Roman Forum and the Capitol building included an “eternal flame” like the Temple of Vesta.  Congress’ inaugural session began on Christmas Day 1789, and the Post Office for decades delivered mail seven days a week, obviously including Sunday.

Article VI in the original Constitution specifically forbade any religious test for officials of the legislative, executive, and judicial branches at all levels of the country, federal, state, and local.  The First Amendment in the Bill of Rights added two years later provided that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof”.  The Obama administration’s new rules do not violate the latter part of that clause in any way, but the propositions of their opponents transgress the primary part of the clause in both spirit and form.

Besides violating the above-mentioned prohibition, exempting the Catholic Church in this country from following in its secular institutions the same rules as everyone else is the equivalent of allowing  facilities of an Islamic denomination in this country with similar secular purposes such as a hospital to force women to wear the veil on the premises.  Or allowing the illegally polygynous Fundamentalist Latter Day Saints  to claim tax exemptions for all their multiple wives. I say that we should keep the First Estate where it is, separate and on the outside.

There is but one answer to this particular dilemma: Universal Healthcare.

Oats from the Horse's Arse: The New Deal, Capitalism's Golden Age, and the Great Recession

Lately in America and elsewhere around the world we have been besieged with pundits and politicians weeping, clawing, and gnashing their teeth as they run around with their hair on fire attacking the social safety nets of various countries as they shriek about the “need” for austerity.  At a time when 18-25% of America’s working people—40% of our youth—are un- or under-employed, they call for sacrifice and talk about the need to make “hard choices” to help the nation and the world recover from the devastation they themselves have wrought upon our economy with their own dishonest, irresponsible, and profligate mismanagement.

Any attempt to make them share the sacrifice, to make the 1% pay their fair share of the burden, is referred to as “class warfare”.  This, mind you, from the very thieves who have destroyed the tremendous gains for the general welfare of the People achieved by the programs which lifted the U.S.A. and the world out of the Great Depression.

With the Republic of France’s President Nicolas Sarkozy at her side, Reich Chancellor Angela Merkel and her plutocratic allies have jammed down the throats of the overwhelming majority of European Union nations a pledge of balanced budgets, consequences be damned.  They are visiting upon their own people the same cruelty which the victors in the First World War inflicted upon the Central Powers, Germany in particular, over reparations for a war all parties had equal culpability in, and by creditors over wartime debts.

Screw the people; in money we trust.  The financial oligarchy must never be without its daily bread, even if the people are relatively starving.  Let them eat cake.

The New Deal and the Golden Age of Capitalism

The period from the end of the Second World War in 1945 through the abandonment of the Bretton Woods system of monetary management (established by the “Allies” at the United Nations Monetary and Financial Conference in 1944) is known to economists and historians alike as the Golden Age of Capitalism.  They gave it that moniker because of the nearly unparalleled expansion of the economies of the nations of the West, and certain other countries, and the uplifting of the general welfare of their citizens as a whole.

Here’s what those political and pundit figures who advocate going back to this Golden Age don’t tell you:  during the majority of this period, 1946-1964, the income tax rate for the wealthiest Americans was 91%, with the threshold for that rate being $200,000.  The rate for the lowest bracket was 20%.  President Johnson’s Revenue Act of 1964 changed those highest and lowest rates to 70% and 14% respectively, and raised the threshold for the top rate to $400,000.  As for the estate tax which Republicans fondly refer to as the “death tax”, during this period of prosperity, once an estate surpassed the $60,000 a tax rate of 77% kicked in.

Union membership in America during this Golden Age was the highest it has ever been, with over one-third of all non-farm workers organized.  The farm workers themselves began to organize in 1962 and joined in a nationwide federation in 1966.  Executive salaries were a mere 12-20 times higher than that of the average worker.

The foundation of all this wealth and prosperity was the New Deal.

Prior to 1913, the American government’s chief source of income was booze.  Not its manufacture and sale, but excise taxes upon those activities.  By the late 19^th century, the yearly average intake of alcoholic beverages (beer, wine, liquor) for Americans had grown to 86 bottles per person.  By contrast, the current alcohol intake rate (2011) is a 14 bottles per person.  Due in large part to America’s saloon culture, alcohol was America’s fifth largest industry.

To provide a larger and more reliable source of revenue for the federal government, Congress and the states passed the 16^th Amendment to the Constitution and subsequently to the U.S. Code allowing the taxing of income.  The initial rates were 1% for the lowest bracket ($1000 and above), with an additional 6% (total 7%) after a threshold of $500,000. By the end of the Great War (First World War), however, these rates had risen to 16% and 77% respectively, though with the upper threshold rising to $1,000,000.

At the end of that war came the First Red Scare, which strengthened the counterattack of the right wing advocates of plutocracy, fueled the growing “hooded Americanism”, and secured the demise of the remnants of the Progressive Era of Theodore Roosevelt, William Howard Taft, and Woodrow Wilson.

The 18^th Amendment to the Constitution took effect in January 1920 and Prohibition began the Roaring Twenties in which many of the Lost Generation fled to Europe.  Politically, so-called progressivism died before the onslaught of William G. Harding, Calvin Coolidge, and Herbert Hoover, along with Andrew Mellon.

Hoover, Secretary of Commerce to both Harding and Coolidge before he became President, dominated the decade more than any other person and is chiefly responsible for all of its excesses and failures, including the Great Depression.  Hoover was a strong advocate of what he called trickle-down economics, the idea that enriching the rich even more richly would create an abundance that would inevitably “trickle down” to the lower social classes.

Ronald Reagan and his budget director David Stockman rechristened Hoover’s ideas as “supply side economics”, but pinned down in an interview Stockman admitted the two were identical.  During the 1980 Republican presidential primary campaign, later Vice President George H.W. Bush correctly characterized the doctrines as “voodoo economics”.

Critics of Hoover and Co. during the Roaring Twenties called their ideas and policies nothing more than a retread of the Gay Nineties horse-and-sparrow theory then in vogue among the robber barons and their supporters, which, in fact, it was.  Even more unkindly than by Marie Antoinette Bourbon, this theory stated that, “if you feed the horse enough oats, some will pass through to the road for the sparrows,”  (John Kenneth Galbraith).  In other words, the non-superwealthy can damn well eat shit and smile about it.

William Jennings Bryan, three-time Democratic presidential candidate and Wilson’s Secretary of State, to this soulless excuse for an ideology of avarice with such abyssmal lack of conscience was:  “There are those who believe that if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests up on them.”

Hoover’s other major ideal was “associationalism”, the idea that, in spite of a mountain range of evidence to the contrary, voluntary organizations are best for citizens taking care of each other and for caring for the less fortunate members of society.  Reagan rehashed this as “volunteerism”, while the PR (propaganda) of Bill Clinton, John Major, and Tony Blair spun this as “public-private partnership”.

As Secretary of Commerce, Hoover was master of all things economic and had his hands in every federal department and nearly every sector of the American economy.  Before he accepted appointment from either, Hoover demanded this authority from both Harding and from Coolidge.  His right hand, a power in his own right with ideas that paralleled Hoover’s, was Andrew Mellon, a banker and industrialist who served as Secretary of the Treasury for Harding, Coolidge, and Hoover himself.

Mellon’s chief goal was to slash taxes, which he did for both those in the wealthiest bracket and those in the lowest.  He reduced the top rate from  73% to 58% in 1922, to 50% in 1923, to 46% in 1924, 25% in 1925, and finally to 24% in 1929.  Meanwhile, the rate for the lowest bracket fell from 4% to 0.5%; however, other changes led to the tax burden on the wealthy not only decreasing but trickling, or rather flooding, down to the less well-off.

After the stock market crashed in October 1929, Hoover continued to spout his theories of low taxes, trickle-down economics, and a laissez-faire market-place up to the day he was replaced by Franklin Delano Roosevelt.  Secretary of the Treasury Mellon was about to be impeached in 1932 and only escaped by accepting his patron’s offer of the ambassadorship to the Court of St. James.  The same Congressmen later sought to impeach Hoover, but saw no need when he was defeated at the polls so ignomiously.

Just to show how the more things change the more they stay the same, among Hoover’s responses to the Great Depression, by the way, was the forced expulsion of some half a million (500,000) Mexican and Mexican-Americans to the Republic of Mexico.

Before Roosevelt had even been elected, Congress passed the Revenue Act of 1932, which raised the bottom rate from 0.5% to 4% and the top rate to 63%.  Before the beginning of the Second World War, the top rate had risen to 79%.

The New Deal of FDR (in office 1933-1945) saved not only the American economy but that of the world, and very probably the Republic itself.  With his leadership, the nation’s of the world began the systems of both temporary relief programs and permanent social welfare agencies along with regulatory agencies that helped bring about the Golden Age of Capitalism.

Some of the temporary relief was provided by programs such as:

National Recovery Administration (coordinator for the whole system)

Federal Emergency Resettlement Agency

Works Progress Administration (infrastructure jobs)

Civilian Conservation Corps (parks and rural areas)

Public Works Administration (infrastructure)

Farm Service Agency (for tenant farmers)

National Youth Administration

These were phased out soon after America’s entry into the Second World War if not before.

The more long-standing New Deal agencies and programs include:

Federal Deposit Insurance Corporation (FDIC)

Federal Savings and Loan Corporation (FSLIC; wiped out by S&L crisis in the 1980’s)

Federal Crop Insurance Corporation

Tennessee Valley Authority (TVA)

Federal Housing Administration (FHA)

Social Security Administration (SSA)

Securities and Exchange Commission (SEC)

Rural Utilities Service (formerly Rural Electrification Administration)

Farm Security Administration

Food Stamp Program

Aid to Families with Dependent Children (AFDC)

Unemployment Insurance program.

In addition, several pieces of legislation were passed that significantly contributed toward the welfare and quality of life for the average American.  Prohibition was repealed as soon as FDR could manage.  The G.I. Bill of 1944 and support for higher educational institutions enabled millions of people who would not otherwise have been able to do so to obtain a college or university education.  The Wagner National Labor Relations Act of 1934 supported formation of labor unions, collective bargaining, and the right to strike, while amendments in 1934 and 1936 to the Railway Labor Act of 1925 did the same for railroad and airline employees.  The Indian Reorganization Act of 1934 provided a means to tribal governments dissolved under the Dawes Act to reorganize.  The Fair Labor Standards Act of 1938 mandated a national minimum wage, an 8-hour workday, overtime pay for work beyond that, and outlawed child labor.

This is the big, bad New Deal over which Republicans, Libertarians, Tea Partiers, and Blue Dog Democrats are constantly wringing their hands.  Though many of its features are included in the programs of what many socialists advocate, they were all in fact enacted for the rescue and maintenance of the capitalist system.

Harry Truman’s (1945-1953) Fair Deal continued and enhanced nearly all the New Deal programs and created the Civil Rights Commission.  He also tried to pass through Congress legislation for universal health care like that in every other country in what was then called the Free World, but lost in the right-wing backlash accompanying the Second Red Scare.

The captains of industry and their Congressional allies also got their revenge with the Taft-Hartley Labor-Management Relations Act of 1947.  It was this legislation which not only authorized but encouraged right-to-work laws such as that which was passed almost immediately in Tennessee and currently in Indiana.  It also prohibited jurisdictional strikes, wildcat strikes, solidarity strikes, political strikes, secondary boycotts, mass picketing, closed shops, and monetary donations to federal campaigns, as well as restricted union shops.  Furthermore, it authorized the feds to enact strike-breaking in the name of “national security” along with forbidding communists and socialists, who had been some of labor’s most effective organizers, from joining unions.

Dwight D. Eisenhower (1953-1961) continued the New Deal and Fair Deal programs unchanged, and also began building the Interstate Highway System.

Adding to the above, John Fitzgerald Kennedy’s administration (1961-1963) New Frontier created the Department of Housing and Urban Affairs, the Peace Corps, and the Appalachian Regional Commission (ARC), the latter serving primarily the Southern Appalachians but also the whole region.

The biggest additions to the social support apparatus came with Lyndon Baines Johnson’s (1963-1969) Great Society.  Among his most important actions were the passing of the Civil Rights Act of 1964 and the Voting Rights Act of 1965.  His administration also created the Volunteers in Service to America (VISTA) program, Job Corps, Head Start, Community Action Program, Medicare, Medicaid, National Endowment for the Arts (NEA), National Endowment for the Humanities (NEH), Corporation for Public Broadcasting (CPB), National Public Radio (NPR), Public Broadcasting System (PBS), Equal Employment Opportunity Commission (EEOC).

Unfortunately, LBJ also pushed through the Revenue Act of 1964 just as he was beginning these new programs and at the same time the surge in Viet Nam.  Inexplicably, at a time when even more than ever was being spent, the tax rate for the lowest bracket was cut to 14% from 16% and slashed from 91% to 70% for the top bracket, with the threshold doubled to $400,000.  This proved to be the first step on the way to the stagflation which choked the American economy, and the world, in the 1970’s.

Even Richard Nixon (1969-1974) added to the programs benefitting the many rather than just the few.  His New Federalism created both the Occupational Safety and Health Administration (OSHA) and the Environmental Protection Agency (EPA).  He also took the United States unilaterally off the Bretton Woods monetary control system, of which the only remaining vestige is the International Monetary Fund (IMF).  In reaction to the sudden spiraling upward of prices resulting from the latter, Nixon instituted price controls initially intended to last just 90 days but eventually lasting nearly three years.

The Evil Empire Strikes Back

In the Seventies, the Counterculture Revolution became the Me Decade.  Love-ins, protest marches, sit-ins, rap sessions, coffee houses, pot, and LSD gave way to mood rings, pet rocks, being dazed and confused, cocaine, disco, yoga, swinging, and leisure suits.   Feminism became about more and better orgasms rather than about equality.  Civil rights gave way to Blaxploitation.  The Gay Liberation Movement (which began on my 6^th birthday) gave way to bath-houses.  The New Left had nothing left.

On TV we watched Soul Train, Hee Haw, Sonny and Cher, Toni Orlando and Dawn, The Brady Bunch, Happy Days, and M*A*S*H. 

Meanwhile, Marcos declared martial law in the Philippines, Pinochet carried out a coup against Allende in Chile, American military involvement Viet Nam ceased, the Yom Kippur War brought  gas crisis of 1973, urban terror by the Red Army Faction and Red Brigades in Europe and by the Symbionese Liberation Army in America sped us up, the ’73-’75 recession slowed us down, we saw the evacuation of the American embassy in Saigon, the Watergate hearings ruined a whole summer of TV for me and other kids, Rocky Horror Picture Show the movie became a cult, we listened to Southern rock, the U.S. had its bicentennial, we read about the Khmer Rouge killing fields, President Carter and his national security guy Brzezinski thought it would be a good idea to poke the Soviets in Afghanistan so they helped organize the Taliban, Star Wars changed movies forever, Lynyrd Skynyrd crashed, the people of Iran overthrew the Shah then found themselves subject to an even greater tyranny, the Hostage Crisis began, Solidarnosc organized the Polish workers in Gdansk first for their rights as workers then a citizens of Poland, John Lennon was shot by a psychopath, and The Empire Strikes Back came out.

Then the Empire struck back for real.  The Baby Boomers became yuppies, Reaganauts, and neoconservatives, peddling rescued excrement dressed up in a pathetic attempt at repackaging.  The same message with a new vocabulary.  This time they called it neoliberalism and/or the “Washington Concensus”, and every president since Reagan, including Clinton and Obama with Bush I and Bush II, has followed the same path.

The Fed raised interest rates on borrowing to 17-18% trying to cure stagflation, which resulted in the housing crash of 1978-1981 bringing with it 22.5 % unemployment among those in the construction trades.

The Hunt brothers tried to secretly corner the silver trade and crashed the stock market on 27 March 1980.

Congress passed the Depository Institutions Deregulation and Monetary Control Act in 1980 which forced all banks to obey the Federal Reserve; allowed banks to merge; removed power of the Fed’s board of directors to set savings interest rates; allowed banks to set own interest rates; and allowed credit unions and S and L’s to offer cheques and other banking services but without regulatory safeguards.

America slipped into recession from January 1980 through January 1983.

In the midst of this recession, Reagan pushed through Congress the Economic Recovery Tax Act of 1981, which lowered the top tax rate from 70% to 50% AND lowered the threshold for that top bracket to $106,000.

He also destroyed our nation’s air traffic safety when he strutted his stuff and fired all the controllers who went out on strike with PATCO in 1981.

Commodities underwent a pricing crunch beginning in 1982 that lasted until 1998.

The Kuwaiti stock market crashed in 1982.

Also in 1982, Congress passed the Depository Institutions Act, which deregulated credit unions and savings and loan banks (S and L’s).  It also created the adjustable rate mortgage, which would prove so helpful to the overall health of the economy in the 2000’s.

From 1982 through 1988, there was a boom in the real estate market.  During the same period, perhaps coincidentally or perhaps not, predatory capitalism which does no one any good had a field day with leveraged buyouts (LBO).  In an LBO, a larger company obtains a controlling interest in a smaller one, uses the assets of the smaller company to finance the loans it used to buy it, and most often sells off anything left over after the loan defaults.

In 1986, Congress at Reagan’s behest passed the Tax Reform Act which lowered the rate for the top bracket from 50% to 38.5% and RAISED the rate for the lowest bracket from 11% to 15%.  It also lowered the threshold for the top bracket to $90,000.

Thanks to the deregulation of 1980 and 1982 and mismanagement by its executives, the savings and loan industry underwent a crisis from 1986 to 1991 that nearly destroyed it completely.  Half of all S and L’s bankrupted, and the FSLIC collapsed completely; its function are now performed by a fund within the FDIC.

On Black Monday, 19 October 1987, the stock market crashed in spectacular fashion while being broadcast over Voice of America, National Public Radio, and other outlets due to market panic, program trading, illiquidity, and overvaluation.

The booming real estate market crashed in 1988 and remained on life-support until 1995.

Reagan’s last gift to his friends was to lower the tax rate for the top bracket from 38.5% to 28% and also to lower the threshold from $90,000 to $29,750.

In 1989 the stock market crashed on Friday 13^th in October due to the failure of the United Airlines buyout.

Also in 1989, Congress passed the Financial Institutions Reform, Recovery, and Enforcement Act which did, in fact, make some actual reforms, but also allowed bank holding companies to acquire thrift institutions such as savings banks and savings and loan associations, taking a few more bricks out of the wall erected by Glass-Steagall.

Not surprisingly, the USA had a recession in 1990 and 1991.

In 1993, the Omnibus Budget Reconciliation Act of 1993 raised the tax rate for the top bracket to 39.6%.

Michael Doonesbury and other get-rich-quick entrepreneurs went boom on the World Wide Web dot com from 1995 to the beginning of the new millennium.

In 1996, Congress passed the Clinton administration-sponsored Personal Responsibility and Work Opportunity Act which placed a lifetime limit on welfare benefits, devolved responsibility for welfare to the states, and instituted a workfare-for-welfare program requirement.

The 1997 Asian financial crisis helped bring on the 27 October crash that year.

Also in 1997, the Clinton administration enacted a change in welfare from Aid to Families with Dependent Children (AFDC) to Temporary Relief for Needy Families (TANF) on the basis of "workfare for welfare" that penalized those unable to work and limited total lifetime benefits to 60 months.

Prices on commodities started climbing steadily in 2000, helping bring on a recession that lasted two years.

President George W. Bush and the Republicans passed the Economic Growth and Tax Relief Reconciliation Act of 2001 which significantly reduced the capital gains tax by 15% and the estate tax by 10%.

A few months later, the U.S. invaded War in Afghanistan.

Between 2002 and mid-2007, there were booms in the housing market, in leveraged buyouts, in collateralized debt obligations, and in debt repackaging.

After invading Iraq in 2003 so that the country was now fighting two wars at the same time, Bush and the Republicans passed the Jobs and Growth Tax Relief Reconciliation Act which reduced revenue by cutting the top tax rate from 39.6% to 35% and raised the top threshold to $311,950.

As if consumers were not getting screwed enough by the credit industry, Bush and the Republicans, with surprising support from a number of Democrats, passed the Bankruptcy

Abuse Prevention and Consumer Protection Act in 2005.  Drafted in 1997 while Bill Clinton was in office, the legislation severely restricted the relief consumers can get from debt should their circumstances or that of the general economy change.

Due to the “China Correction”, stock markets world-wide crashed in February 2007.  The subprime mortgage market in the U.S. fell not long afterward and the Great Recession began.  It hasn’t ended yet.

Meanwhile, irresponsible speculation on food and fuel futures sent food prices and fuel prices both spiraling upward.

With the credit industry, including some of the largest banks in the world and insurance companies too, on the verge of collapse, Congress authorizes and President Bush authorize the Troubled Asset Relief Program (TARP) in 2008.  Eventually totaling four hundred seventy-five billion dollars ($475,000,000,000), the program calls for the American taxpayers to rescue the financial bourgeoisie from the results of their own myopic greed and avaricious dishonesty.

While the public rages over TARP, future 2009 TIME Person of the Year Ben Bernanke and the Federal Reserve board of directors secretly loan American and foreign banks and financial institutions what respected finance magazine Bloomberg Businessweek totals as seven-point-seven TRILLION dollars ($7,700,000,000,000).  Other sources investigating further give the figure twenty-nine TRILLION ($29,000,000,000,000).

Presidents Bush and Obama and Congress bailed out the troubled American automotive industry (Chrysler, General Motors, Ford), which kept manufacturing suburban assault vehicles long after those became highly impractical, with the total coming to $130 billion.

President Barak Obama and Congress passed the American Recovery and Reinvestment Act (ARRA) in 2009 for $787,000,000,000.

The stock market has crashed at least three times in the past couple of years, several days in a row this past August (2011), in fact. 

Up to the Past, and Beyond

For thirteen of the past thirty-one years we have been in severe recession.  In real terms rather than the rosy forecasts from government offices, 18-25% of America’s working people are unemployed or underemployed either in type of work according to their abilities or in hours, and for our youth, that rate climbs to 40%.

Soon, we in America will find ourselves in the same position relatively speaking, to that of our ancestors in the Gilded Age, the Belle Epoque, when the robber barons were masters of the universe, the golden age for Hoover and his cronies.

According to Edward Bellamy, author of Looking Backward: 2000-1887 and president of the Nationalist Clubs, at the apex of the Gilded Age 31,000 men held half the wealth of the nation’s 65,000,000 persons, 9% of the U.S. population owned 71% of the wealth of the country, leaving 29% to the remaining 91% of the population; and 4,074 persons or families owned one-fifth of the total wealth of the country, nearly as much as that bottom 91% of the people.

Then again, maybe we’ve slidden all the way back to the early days of the Republic, when Congress mirrored the legislative assemblies of Europe minus their clergy and hereditary nobility.  The 400 richest persons in America (0.000001% of the population) have as much as the bottom 150,000,000 people (50% of the population). Figures from the 2010 census indicate that the approximately the same number as the poor in our country.  That top 1% we’ve been hearing so much about control 60% of the wealth of the country, leaving a mere 40% of the wealth for the bottom 99% upon which they sit.

The number of poor relative to the wealthy who graduate college or university has dropped by 50% since Reagan and Stockman first started slashing federal aid to undergraduate institutions in the early 1980's.

During the Golden Age of Capitalism (1946-1971), the income tax rate for the wealthiest Americans was 91%, with the threshold for that rate being $200,000.  As for the estate tax which Republicans fondly refer to as the “death tax”, during this period of prosperity, once an estate surpassed the $60,000 a tax rate of 77% kicked in.  Today, the tax rate for the top bracket is 35% with a threshold of $379,150, while the estate tax is 35% of anything more than $5,000,000.

If Mr. Herbert Hoover lived today, he might have a different idea of his “golden age” for the wealthy in America.

“If you feed the horse enough oats, some will pass through to the road for the sparrows.”

Meanwhile, the rest of us follow behind them with a pooper-scooper to catch the oats trickling down from the arses of their horses.

Social class in America and a VERY brief history of Capitalism

“None are more hopelessly enslaved than those who falsely believe they are free.” (Johann Wolfgang van Goethe)

To paraphrase Ben Martin in “The Patriot”, when the United States was founded, we traded one tyrant three thousand miles away for three thousand tyrants one mile away.  A national legislature made up of “Commons”, but not actual common people.  The Third Estate as our French cousins called it.

From medieval to early modern times, legislatures of European governments were divided into three distinct categories, more or less the same in all countries with only a few variations.  In the Estates General of France, for example, the First Estate was the clergy, particularly the higher clergy.  The Second Estate was the hereditary nobility.  The Third Estate was the “commoners” as a collective body, dominated by the wealthiest of the wealthy, almost all of them town-dwellers, or “bourgeoisie”, but including rich rural landholders and rentiers of the other-than-hereditary-aristocrat variety.

In Scotland, the Community of the Realm was divided into Prelates, Lairds, and Burghers, the latter being the same as the Third Estate.  In England, Parliament was made up of Lords Spiritual, Lords Temporal, and Commons, in this case including knights without other title along with burghers from the towns.  The Imperial Diet of the Holy Roman Empire included Clergy, Nobility, and Burghers.

You can readily see the theocratic nature of European society at the time these legislatures were first composed in the fact that the first order was clerical in all cases.  As for the Third Estate, to give a general name for the same class in all countries, it and its electors were confined to the richest non-aristocrats, corresponding to what in ancient Rome became the equites, the richest of the rich plebes, equal in all but DNA to the patricii.

The same sort of men who belonged to the Third Estate in Europe made up the colonial legislatures in America as well as their entire electorate.  In truth, the only effective change in regime between the colonies under the United Kingdom and the new government of the United States was the abandonment of recognition of hereditary nobility.  Since all the hereditary nobility was several thousand miles across the Atlantic, the real change in that case was virtually nonexistent.

Now, with the Constitution of 1789 and the Bill of Rights of 1791, the First Estate (the clergy) and its influence were forever barred from government.  That was indeed a significant advance for humanity, though in practical terms, the clergy in most of Europe took very little actual hands-on role in government by this time, the exceptions being Spain and Italy (in France their main influence was as landlords).

So, the “new nation, conceived in liberty”, founded on the principle of “government of the people, by the people, and for the people” and based on the foundation that “all men are created equal”, was actually ruled by a tiny minority of extremely wealthy trade merchants and slave-holding plantation owners (the two of which easily fit the parameters for inclusion in France’s Third Estate) who had little more than contempt for and often great fear of its toiling “tired, poor, huddled masses yearning to breathe free”.

Read the essays in The Federalist Papers written by Alexander Hamilton and John Jay (as opposed to those written by James Madison), and you will see exactly what I mean.  The future Secretary of the Treasury had, in fact, spearheaded an attempt to make the nation a constitutional monarchy with Bonnie Prince Charlie, the Stuart pretender to the throne of the United Kingdom formally known as Charles Edward Louis John Casimir Sylvester Severino Maria Stuart, as its titular ruler.

In his aborted venture, Hamilton had the full support of the Continental Congress and of the most prominent man politically in the former colonies, the future first President of the  United States His Excellency George Washington.  To be sure, there were voices of a much more genuinely democratic nature such as Thomas Paine, who failed to see Washington’s true colors until his own imprisonment and near-execution during the Reign of Terror in France, but these were the rare exception rather than the rule.

(To be fair, George Washington did lean toward republican sympathies, but he was most certainly a man of his own class rather than of the people.)

In other words, the overwhelming 99% majority of persons inside its borders of the brand new United States of America were without franchise, with no Estate, and virtual outcastes, or untouchables if you will, in their own land, at the mercy of the 1% above them.

Along with many other people, I have often wondered about where the iconic division of society into 1% over 99%, much-repeated since the Occupy Wall Street movement was launched, came from.   Since it’s been nearly three decades since I graduated the University of Tennessee at Chattanooga (UTC), not too much of what I studied in my sociology classes is bubbling up close to the surface.  It was only when I was reviewing articles on social class in America that I realized that nearly all sociologists commenting on the subject identify a class of people at the top comprised of approximately 1% of the population.

No matter how they divide up the rest of the population, and no two sociologists agree on the number of classes, what to name them, what characteristics make up the members of each level, all agree that there is a 1% group atop a pyramid of the other 99%.  What to call this elite clique none can agree on, however, some sociologist using the designation “the upper class”, others calling it “the super-rich”, some by the quasi-Marxist name “the capitalist class”.

These are the people Marx and Engels called the “bourgeoisie”, or sometimes more specifically the “haute-bourgeoisie” to distinguish them from their admirers and would-be imitators, the petite-bourgeoisie.  The word “bourgeoisie” had already acquired a meaning similar to the one with which the two founders of Marxism used it.  Originally, the word simply meant “town-dweller”.  Later, particularly after monarchs began to gather together assemblies of notables from around the country, its definition became more restricted, eventually confined to something resembling today’s “1%”.

For Marx and Engels, the term bourgeoisie referred almost exclusively to industrial capitalists, the owners of the means of production as private property.  Though they both occasionally referred to “finance capitalism” and “rentier capitalism”, for the two of them the primary struggle was against industrial capitalists, so the undifferentiated word bourgeoisie meant them.

“Private property”, by the way, does not refer to a person’s house (no matter how grandiose) or car or clothes or silverware or computer or books or anything of the kind.  All those objects are personal property.  As opposed to public property, private property is anything from which capital can be used to make a profit that is owned by one or more private individuals.  Now public property, its opposite, is anything collectively owned by the greater body of citizenry for the benefit of all its members, whether it be government buildings, parks, roadways, or public corporations indistinguishable from their private counterparts.

No socialist of any reputable and non-extreme variety has at any time recommended the abolition of personal property.

The narrow focus of Marx and Engels on industrial capitalism, i.e. that involving industrial manufacturing, obscured the role of the capitalist financial system in creating the conditions under which both industrial capitalism and rentier capitalism flourished.  Lenin dealt with it more extensively, but even though he correctly acknowledges that by his time finance capitalism had surpassed the former, he shared their mistake in making the latter its child rather than its parent.

Incidentally, Lenin also came up with the concept of imperialism as a latter-day stage of capitalism, and some less flexibly minded advocates of Leninism argue that imperialism did not exist before the capitalistic “Age of Imperialism”, which lasted 1870-1914.

First, let’s be clear about the three different capitalisms.

Industrial capitalism is the use of man-made goods to produce other man-made goods of higher value derived primarily from the labor put into their manufacture with that surplus value primarily used as profit to the bourgeois owner(s) of the private property.

Rentier capitalism, by the way, involves the bourgeoisie in question receiving income primarily from real property-based sources in rent, intellectual property rights, dividends, fees, and capital gains.  You know, the way Mitt Romney gets all his income.

Finance capitalism, the “mother” of all other capitalisms and of the bourgeoisie in the modern sense of the term, refers to individuals deriving their income from buying, selling, and/or investing in stocks, bonds, futures, other derivatives, currencies, and the loan of money at interest.  Insurance companies also fall under this heading.

Needless to say, a member of the bourgeoisie can benefit from any two or all three varieties of capitalism and most do so.

The roots of modern capitalism go back to what might be called among the most medieval of circumstances.  Except for the Inquisition, the Crusades were among the most barbaric, narrow-minded, and superstitious of actions carried out by the West.  On the other hand, they were instigated by the appeal in 1095 of the Roman emperor at Constantinople, Basileus Alexios I Sebastos, to Pope Urban II at the Lateran Palace for help against the Seljuk Turks who by now occupied much of Anatolia.

Similar to the appeal 1169 of Dermot MacMurrough to Richard de Clare (Strongbow) for help regaining his kingdom of Leinster from which he had been deposed by Rory O’Connor, the High King of Ireland.  Look how that turned out for the Irish.

Constantinople had been the primary capital, now sole capital, of the Imperium Romanum or Basilea Rhomain since the time of Diocletian.  Its emperor, bureaucracy, and population considered it and themselves Roman, every bit as much as their Western counterparts still considered themselves.  Even their primary enemies, the Seljuk Turks, thought of them and their territory as Roman, using the name Rhum.

The Crusades lasted 1095-1291, and during that time the powers-that-be needed to move huge amounts of men and material across vast spaces and several international borders, and therefore needed a system to arise since none then existed.  In addition, once territories were established in the Levant, pilgrims and tourists needed both protection and a way to shift money without it being vulnerable to theft.

Of the five military orders that arose to fight the Crusades, the Knights Templar were the largest and most diverse, with the widest holdings and the biggest coffers.  Therefore, it is not too surprising that their ingenious brothers developed the system of finance which serves as the foundation for modern banking.  They allowed others to deposit their wealth, issued letters of credit, and gave it back to them as needed, with, of course, fees for their services.  They even exploited loopholes in Church law and of the various nations in Europe to lend money at interest.

Not surprisingly, this last improvement in their services eventually brought about the Templars’ downfall, due to massive outstanding loans made to leaders and governments across Europe, in particular to Philip IV of France and to the See of Rome.  Its leadership was destroyed, its possessions seized, its wealth redistributed.

The Knights Hospitaller and other orders had been likewise dabbling in banking, but to a much lesser extent.  They quickly divested themselves of those businesses.

Besides Philip IV and Pope Boniface VIII (and the Knights Hospitaller), the primary beneficiaries of the Templars’ demise were the Italian maritime republics of Venice, Genoa, Pisa, Amalfi, Florence, Ancona, and Ragusa (in Dalmatia but influenced by Venice).  Independent, each had originated in the late 6th century as a ducatas (territory ruled by a dux) under the Roman Empire’s Exarchate of Italiae.  By the 9th century, all had successfully broken away.

All these republics took over the financial system abandoned by the Templars upon their demise.  They even enhanced some of its conveniences and methods of gaining profits, most especially inventing new legal fictions for charging credit.  Their coastal locations and easy access to exploit maritime trade helped make the republics the richest “countries” in Europe and launch the Italian Renaissance.

More than any of the others, the Republic of Venice benefitted from the Crusades, with its holdings and sources of revenue greatly enhanced.  With it in the unquestioned dominant role, Venice these coastal city-states in controlling nearly all the trade in the Mediterranean Sea and overland to the Far East.  For that reason, nations desiring to cash in on trade from the East or bypass that trade to go directly to the source began searching the globe.

Thus began the Age of Exploration.  A century and a half into this era, 250 men came together to share the financial risk of their attempt to bypass the similar stranglehold of the Dutch Republic on trade in the North Sea.  Their aim was trade with Russia.  Each of the 250 had a share of ownership proportional to their investment called a “stock”.

The company, chartered in 1553, was the Company of Merchant Adventurers to New Lands, and a couple of years later it became the Muscovy Company.  It is the first known joint-stock company.  Several more followed, and in 1600 the London government issued a charter for the English (later British) East India Company.

The Dutch Republic followed with its own East India Company in 1602.  Eventually so did Denmark (1616), Portugal (1628), France (1664), and Sweden (1731).  The Dutch East India Company’s innovation was the stock exchange where people could trade shares, speculate about the company’s fortunes, etc.

Joint stock companies served as the primary means for financing the colonization of the Americas.  The Virginia Company, Massachusetts Bay Company, and Hudson’s Bay Company for England, the New Netherlands Company, the West India Companies of the Dutch Republic, Denmark, Sweden, and France, the New Sweden Company, the Company of New France, France’s Mississippi Company, and Scotland’s Company of Trading to Africa and the Indies were all joint-stock capitalist companies for commerce and colonization of varying degrees of success.

Beyond question the most successful and profitable of them all, the British East India Company became the very epitome of the very worst features of capitalist imperialism and monopoly.  It became a virtual private state unto itself, eventually holding in its grasp the entire Empire of India, with the full force of the crown backing it up.

Its monopoly over the triangular commerce in the Atlantic, as far as the United Kingdom’s American colonies were concerned, helped lead to the American Revolution.  In particular, its monopoly over import-export trade and the London Parliament’s passage of the Tea Act on its behalf led to the First Boston Tea Party of 1773, Second Boston Tea Party of 1774, and Chestertown Tea Party of 1774.

With the victory of the American bourgeoisie, the aristocracy became extinct and the clergy irrelevant for the time being.  Only the Third Estate remained.  The new elite named its new capital New Rome, later changing it to what it is now.  It named many of the features of the city for one’s in the ancient Rome, designed its Mall after the Forum, and made the rotunda in its Capitol building a replica of the Temple of Vesta.  Congress first came to order on Christmas Day 1789, and the mail ran every Sunday until after the Civil War.

Gradually, however, the bourgeois elite realized they needed to pacify the proletarian majority and therefore began to enfranchise more of its members as well as give religion more free reign.  In particular regarding the latter, religion became one of the chief justifications for the continuation of slavery, which in turn became one of the chief reasons why the South, once the least religious regions on the continent with inhabitants indifferent at best, became the Bible Belt it is now.

In spite of the increase in the franchise (i.e. right to vote), the average citizen has little more say in government than the holder of a life insurance policy has over the companies in which he holds a share by virtue of that policy.  That and the myth (a la Horatio Alger) that America is a meritocracy where someone can pull themselves up by their bootstraps, work hard, obey all the rules, and do well, serve to keep the 99% in place.

Should any attempt to protest that society is unfair, that too many resources are being wasted on profligate parasites pursuing personal pleasure and comfort and security regardless of the harm to the welfare of the general public, there is always the shame of being poor.  The shame of having to admit that one is not, in fact, merely a temporarily embarrassed rich person.  That you are merely one of the “wretched refuse” of America’s teeming shore, yearning to be free.