THE NEW CLASS WAR

Ned Resnikoff writes about Nona Willis Aronowitz's article in the latest GOOD about attempts to organize labor in the restaurant industry:

[Quoting Aronowitz:]

"Activists like Erik face a two-pronged problem: Middle-class kids don’t want to bother with unions because they have one eye on the door. Workers from the permanent underclass like Levi don’t join because they accept that these jobs are shitty, and if they’re fired, they’ll just have to go get another one. It happens all the time—Levi lost his job this fall, for reasons having nothing to do with the union. Turnover is what the industry depends on."

The problem with middle class kids strikes me as one of education: like students in unpaid internships, it seems like white-collar hopefuls seeking temporary restaurant labor have no recognition of themselves as part of a broader worker class, and don’t see how the exploitation in the restaurant industry can distort the entire labor market. Efforts like the Wobblies’ admittedly sort of quixotic Starbucks campaign (which Aronowitz shouts out in her article) are encouraging because they provide a vehicle for raising these issues.

Levi’s problem is not one of education. As a member of the permanent underclass, he’s better informed about the structural violence of the restaurant industry than those middle class kids. But he also recognizes that, if he openly supports the union, he’ll be fired and pushed into (at best) an identical job at another restaurant. In part this is because what’s left of the social safety net is structured, as I’ve written before, to force people into whatever work is available. In part it’s because modern labor election law is firmly on the side of employers. Levi may have the formal right to organize within his workplace, but that doesn’t mean his boss can’t fire him for whatever other reason — and if he takes up what smells like a wrongful termination with the NLRB, there’s virtually no chance they’ll move fast enough for even a positive ruling to make a difference.

Peter Frase:

Nearly three years since the ostensible end of the recession, the United States is still beset by over 15 percent underemployment—millions of Americans who would like to work full time and either can’t find jobs, or can only find part time work. We know from a large body of research that unemployment and underemployment have many negative consequences, not only financial but physical and mental. But this plague of underemployment exists alongside the corresponding problem of over-employment.

It's quite tricky to excerpt Frase's explanation of the problem of over-employment without excerpting nearly all of it, so you'll want to read the full article.

Rortybomb:

"The top 1% had a rough Great Recession.  They absorbed 50% of the income losses, and their share of income dropped from 23.5% to 18.1% percent.  Is this a new state of affairs, or would the 1% bounce back in 2010?

“People who don’t have money don’t understand the stress,” said Alan Dlugash, a partner at accounting firm Marks Paneth & Shron LLP in New York who specializes in financial planning for the wealthy. “Could you imagine what it’s like to say I got three kids in private school, I have to think about pulling them out? How do you do that?”

“If you’re making $50,000 and your salary gets down to $40,000 and you have to cut, it’s very severe to you,” Dlugash said. “But it’s no less severe to these other people with these big numbers.”

A Wall Street executive who made 10 times that amount and now has declining income along with a divorce, private school tuitions and elderly parents also suffers, he said.

“These people never dreamed they’d be making $500,000 a year,” he said, “and dreamed even less that they’d be broke.”

Ta-Nehisi Coates writes:

Tanya McDowell, the Bridgeport mother accused of fraudulently enrolling her son in a Norwalk school and stealing educational services from the district, has plead guilty:

"In all, McDowell was sentenced to 12 years in prison, suspended after she serves five years with five years probation. She could be forced to serve more time if she violates the terms of her probation. McDowell also pleaded guilty earlier this month in Bridgeport to two counts of sale of narcotics to undercover police officers. 

She is to be sentenced on the Bridgeport charges March 27 and faces up to five years in jail for those convictions. As part of the plea bargain, McDowell would be able to serve the sentences from Norwalk and Bridgeport concurrently. Crosland said he tried to separate the drug cases from the school case, but prosecutors and the judge would not split them. He said she was facing much more than 15 years in jail if he took all the cases to trial. 

As a result he was forced to take an "all-or-nothing deal," he said after the hearing. Hudock said that as part of her probation, McDowell will have to make restitution to Norwalk in an amount not to exceed $6,200 -- the estimated cost of her son's education."

My point is not that McDowell did nothing wrong. The New Class War refers you to Taibbi:

Mike Konzcal responds to a post by Will Wilkinson ruminating on the New York Times safety net article we mentioned earlier:

Alex Gourevitch and Aziz Rana have a great article as a part of Salon's "the 99 Percent Plan" series, which seeks to explain how, even as income inequality and social immobility are becoming increasingly common topics of political debate, the common political rhetoric that opposes "equality of opportunity" with "equality of outcomes" misses a deeper distinction between different understandings of what social mobility might mean. The article is worth reading in full, but to best understand it, The New Class War recommends first reading Rana's earlier piece on a similar theme for N+1. Here's a quote from that earlier article:

"Throughout our history there have always been multiple versions of the American dream. These accounts held in common the hope that hard work, discipline, and self-reliance would allow those recognized as citizens not only to improve their economic lot and achieve personal happiness, but to participate fully in political life. Today, however, only one version of the dream continues to make sense as a sustainable personal project. This is the dream exemplified by Barack and Michelle Obama—as well as by their former rivals Hillary and Bill Clinton—a dream of success through higher education and a life in professional work. It is a vision of social advancement that leaves little room for historically important narratives of blue-collar respectability. At the time when Brandeis was describing the promise of professionalism, three earlier accounts of the American dream not only survived but were real competitors for social preeminence. In Thomas Jefferson’s founding republican vision, yeoman farmers were “the most valuable citizens . . .   the most vigorous, the most independent, the most virtuous, . . . tied to their country and wedded to its liberty and interest by the most lasting bonds.” To this Jeffersonian vision of “the cultivators of the earth,” a rapidly urbanizing nineteenth century added the small-business owner and the unionized industrial worker. The former aspired to the same freedom as the farmer by cultivating a shop instead of acreage; the latter strove (with mixed results) to achieve economic independence through collective political activity. In Brandeis’s time, these three versions of the American dream each still constituted a viable route to meaningful political and social life. Today, by contrast, all such dreams are essentially foreclosed. The independent farmer lives on in the national imagination, but industrial farming has rendered him marginal both politically and socially. The quantity of small businesses begun each year suggests that the aspiration of having one’s own shop persists. Yet for the past half-century bankruptcy has been more likely than success. Statistics cited by Bush’s own Small Business Administration (SBA) show that more than half of small businesses close within four years and more than 60 percent within six. The title of the SBA article, “Redefining Business Success: Distinguishing Between Failure and Closure,” perfectly captures the difficulty of sustaining optimism, even for propaganda purposes, about the vitality of small-scale entrepreneurship. As for blue-collar workers, deindustrialization and the weakening of the labor movement have made the wage earner’s dream of middle-class respectability less and less tenable. Real incomes for working-class families have been declining for three decades, and highly skilled jobs once available to high school graduates are now memories from a previous era. ...we have been left with the professional ideal, which values only certain types of work and thus implicitly disdains the rest. It is an inherently exclusive ideal, structured around a divide between those engaged in high-status work and those confined to task execution. The political theorist Iris Marion Young writes, “Today equal opportunity has come to mean only that no one is barred from entering competition for a relatively few privileged positions.” The idea of exclusivity is a necessary structural feature of professionalization. As a model for society, however, it validates an economic and cultural divide between those with meaningful access to social respectability and the vast majority of Americans, who remain consigned to low status and low-income employment. This divide is antithetical to democracy. The professional and educational meritocracy justifies a basic hierarchy in which only those with professional status wield political and economic power. The democratic ideal of ordinary citizens collectively deciding the fate of key institutions has little in common with this logic—a logic that is aristocracy by another name. Precisely because all three alternative versions of the American dream were universal, all imagined work—whether industrial, agricultural, or entrepreneurial—as a training ground for democratic citizenship. Farmers and entrepreneurs developed the personal virtues necessary for political decision making. As for the industrial worker, the union was considered a continuous education in democratic control, and one’s role in its management and success were a miniature form of collective self-rule."

But you should really read the full thing. (And don't forget to read the more recent article at Salon.)

Both James Kwak and Mike Konzcal make excellent points in response to the recent (and also generally good) New York Times article "Even Critics of Safety Net Increasingly Depend on It". From Kwak's response (which contains a link to Konzcal's piece):

"The idea that politicians have expanded the safety net is just not true, with the exception of the Medicare prescription drug benefit and an expansion in Medicaid that hasn’t taken effect yet. Spending on social programs has increased for a few obvious reasons: the baby boomers have started taking Social Security benefits, increasing that program’s expenditures; the recession boosted unemployment benefits, disability claims, and eligibility for poverty programs; and most importantly, health care has gotten much more expensive.

But those programs themselves haven’t gotten more generous (except, again, for Medicare Part C), nor have they expanded to cover more people. Instead, as Mike Konczal shows in detail, the federal government took an axe to the safety net back in the 1990s (remember welfare reform?). Remaining programs such as TANF have declined in real value. What has happened is not that the safety net has gotten more robust, but that the same real benefits have gotten more expensive because of demographic shifts and excess health care cost growth.

In short, the middle class is getting a larger proportion of “safety net” payments not because that net is expanding from the poor to the middle class, but for two other reasons: one is that we’ve cut the programs for the poor; the other is that health care is getting more expensive.

More from Frum's review of Murray's book:

Here is where it seems to me that Charles Murray is most deeply wrong.

He insists Americans are facing an unprecedented situation. That is not true. We have been here before. In the years between the Civil War and the Great Depression, we also saw increasing concentrations of great wealth—at the same time as many working Americans, moving from farm to city, suffered the pain of moral dislocation and social breakdown. Crime, prostitution, and drunkenness ran then at least as rampant as the analogous ills run today.

And in those days too, there existed writers and thinkers who insisted that these trends represented the necessary consequences of ineluctable social consequences. Murray's claim that the "reality that has driven the formation of the new upper class [is that] brains have become much more valuable in the marketplace" has its almost exactly precise analogues in the writings of Social Darwinists like William Graham Sumner.

There was however at least one hugely important difference between those days and our own. Back then, the lower class, rather than sink meekly into its immiseration, periodically erupted in violent strikes and riots. American labor relations in the period from 1880 through 1920 were the most violent on earth. In 1901, an anarchist murdered President McKinley; in 1919-20, a bloody wave of bombings culminated in an explosion on Wall Street that killed that killed 38 people and wounded 400 more.

Many elite Americans decided something had to be done. Yes, they engaged in a great deal of the lecturing and scolding recommended by Charles Murray. (See Part 3 of this review.) But they also worked to find ways to ameliorate conditions for working Americans. Violent strike-breaking went of style, to be replaced by gentler managerial practices. State governments enacted wage and hour laws. Even the federal government acted to enforce national food safety standards in 1906. This was the famous Progressive era. Although there was much about Progressivism that we'd rightly reject today, there was much that could stand rediscovery and renewal.

From part 3 of David Frum's generally excellent review of Charles Murray's Coming Apart:

Back in 1962, no individual American controlled a national television network, as Rupert Murdoch does today. (The legendary William Paley owned only about 10% of the stock of CBS.)

Back in 1962, it was considered shocking, and even frightening, for an extremely rich man like Nelson Rockefeller to use his fortune to gain political office.

Back in 1962, most political donations were kept secret. But when it came to light after Watergate that insurance magnate W. Clement Stone had donated $2 million to Richard Nixon's two presidential campaigns, Americans were scandalized. In 2004, by contrast, the John Kerry campaign and related organizations collected $75 million from only four donors.

Charles Murray deplores our present state as a betrayal of the founders' vision of the country. I am not certain of what the founders as a group would have thought about affluent people taking safaris to Africa. My guess is that Benjamin Rush would have disliked it, while Benjamin Franklin would have been untroubled—but who knows?

But here's what we do know: almost unanimously, the Americans of the 1790s agreed that vast inequality of fortunes—at least as between white men—were inimical to Republican government. Here for example is Noah Webster, writing in 1790 (I've corrected his idiosyncratic spelling):

The causes which destroyed the ancient republics were numerous; but in Rome, one principal cause was the vast inequality of fortunes.

....

The basis of a democratic and a republican form of government is a fundamental law favoring an equal or rather a general distribution of property. It is not necessary nor possible that every citizen should have exactly an equal portion of land and goods, but the laws of such a state should require an equal distribution of intestate estates, and bar all perpetuities.

It's worth noting that Noah Webster was a Federalist, not a radical Republican. What he wrote there would have received nods from almost every member of the founding generation, John Adams most emphatically, but also the aristocratic Thomas Jefferson. Jefferson went so far as to endorse a progressive income tax in a 1785 letter to James Madison.

(And here you thought the idea came from Karl Marx, or possibly Saul Alinsky.)

Republican government rested on a broad equality of fortunes: that was conventional wisdom in the founding generations.

Peter Frase writes at Jacobin:

Digby points out that the enormous bonuses Goldman Sachs employees are paying themselves this year -- proportionally even bigger than last year, despite the company having its poorest earnings performance since 1999 -- look rather like looting:

If I didn't know better, I'd think these people were looting their own company in anticipation of a massive failure: "Goldman Sachs will stoke the fury over bankers' bonuses this week when it increases the proportion of revenues paid to staff despite what could be its worst year for earnings since 1999. The bank – which will report its final results for 2011 on Wednesday – has already set aside 44 per cent of the $22.76bn (£14.89bn) of revenues it generated during the first nine months of the year to pay staff. The lion's share will be shared by a small number of elite level "partners". If pay remains at that level in the fourth quarter, the final compensation ratio will show a significant rise over the 39.3 per cent of revenues handed out by Goldman in 2010, when the total pay out was $15.38bn. Although the average salary for the first nine months enjoyed by Goldman employees is down to $292,397 from $370.056 in the first three quarters of 2010, that the bankers' share of revenue is rising will anger critics. This would counter banking industry arguments that remuneration policies are set up to reward those who generate good performance for all the bank's shareholders rather than just to keep senior staff in the manner to which they have become accustomed."

It has been noted that, during Mitt Romney's tenure at the helm of Bain Capital, 22% of the companies that Bain invested in either went bankrupt or closed their doors.

In Bain's defense, it has also been noted that many of these companies were targets for takeover because they were already ailing, and that a one-fifth failure rate is not surprising or unusual.

This may or may not be true.  It is beside the point.

What makes Romney's tenure at Bain an excellent example of class warfare is that Bain extracted massive profits from businesses even as they failed:

"In 1996, Bain invested $27 million as part of a deal with other firms to acquire Dade International, a medical diagnostics equipment firm, from its parent company, Baxter International. Bain ultimately made ten times its money, getting back $230 million. But Dade wound up laying off more than 1600 people and filed for bankruptcy protection in 2002, amid crushing debt and rising interest rates. The company, with Bain in charge, had borrowed heavily to do acquisitions, accumulating $1.6 billion in debt by 2000. The company cut benefits for some workers at the acquired firms and laid off others. When it merged with Behring Diagnostics, a German company, Dade shut down three US plants. At the same time, Dade paid out $421 million to Bain Capital's investors and investing partners."

Surprise! Mitt was not being entirely truthful (was lying) when he said he would not cut taxes for the rich, as Jonathan Chait notes:

"Mitt Romney has been insisting for a while that he will not cut taxes for the rich, which everybody took to mean that he would lock into place the enormous, expiring Bush-era tax cuts for the rich, but cut taxes no deeper than that. He has said so over and over again. Here he is saying, "If I'm going to use precious dollars to reduce taxes, I want to focus on where the people are hurting the most, and that's the middle class. I'm not worried about rich people.” And here’s Romney insisting, “I’m proposing no tax cuts for the rich.”

Today the Tax Policy Center analyzes his plan, and it turns out that Romney would, in fact, cut taxes for the rich, even below current levels. The highest-earning one percent would get an additional tax cut averaging $82,000 a year. Romney’s plan would also raise taxes on the lowest quintile by an average of $157 a year."

Corey Robin pulls some choice quotes from a Bloomberg article in which the very rich "defend wealth" (or, as Robin more accurately describes their comments, "toggle between a haughty contempt for the lower orders and a genuine, self-pitying sense of persecution"; or, as the article's URL even more accurately describes its contents, "bankers-join-billionaires-to-debunk-imbecile-attack-on-top-1-.html"):

Y'all were wondering why half of Americans don't pay income taxes?

"Squeezed by rising living costs, a record number of Americans — nearly 1 in 2 — have fallen into poverty or are scraping by on earnings that classify them as low income.

The latest census data depict a middle class that's shrinking as unemployment stays high and the government's safety net frays. The new numbers follow years of stagnating wages for the middle class that have hurt millions of workers and families."

Also, fuck Robert Rector and the bullshit he rode in on:

"Robert Rector, a senior research fellow at the conservative Heritage Foundation, questioned whether some people classified as poor or low-income actually suffer material hardship. He said that while safety-net programs have helped many Americans, they have gone too far. He said some people described as poor live in decent-size homes, drive cars and own wide-screen TVs."

There is nothing that epitomizes the new class war more than propaganda whose aim is to convince you that the poor are not really poor.

These are the facts:

Matt Yglesias writes:

Next time you read an article about the behavioral response to marginal tax rates on high income earners, I would urge you to refer back to JP Morgan Chase CEO Jamie Dimon's fine whine that "most of us wage earners are paying 39.6 percent in taxes and add in another 12 percent in New York state and city taxes and we're paying 50 percent of our income in taxes."