Screwed the Undeclared War Against the Middle Class (12 page)

In addition to creating a strong economy, FDR acted to control the game of business. He set up the Federal Deposit Insurance Corporation (FDIC) to ensure that people would be able to keep the money they saved in banks. He imposed regulations on stock sales, protecting middle-class people who invested their savings in the stock market. He moved against monopolies through the Public Utility Holding Company Act of 1935, which broke up large electrical conglomerates, and he fought for an expansion of existing antitrust legislation.

Along with fighting for the rights of We the People in the present, Roosevelt looked to the future. He furthered the cause of public education through the GI Bill, which sent millions of young men and women to college and technical schools in the late 1940s and early 1950s. Although it was never carefully measured, some historians suggest that well over half of the GI Bill college graduates in the 1950s were the first in their families to graduate from college. Not only did this provide America with a huge competitive edge in an educated workforce but it also represented the first and largest shift in American history of people from the ranks of the working poor into the ranks of the working middle class. Not until Lyndon Baines Johnson declared a War on Poverty in the 1960s, cutting poverty in half in its first four years, would a program so effectively provide for social mobility.

Roosevelt's programs worked. His economic stimulus programs put money in the pockets of the people, and their purchases created consumer demand, which led entrepreneurs to start businesses to meet that demand, which meant they had to hire workers, who were well paid because 35 percent of America was unionized. Those well-paid workers bought more goods, creating more demand, and America became the world's strongest economy through most of the twentieth century. The New Deal ushered in what has been called the Golden Age of the middle class, from 1940 to 1980.

The basic philosophy of the New Deal was a fusion of the thinking of Thomas Paine and Thomas Jefferson—a platform of progressive economics and personal freedom combined with the empowerment of the average person. Roosevelt's message to business was simple: you're welcome to make money in America—in fact, we
want
you to—but you must understand that you are making money within our society, using the superstructure and the substructure of our democracy, and therefore you are answerable to our democracy. The economy exists to serve the members of our democracy, not the other way around. If you want to play the game of business, you're welcome to do so according to our new rules, which protect workers and consumers, provide for the creation of a middle class, and keep the government democratic.

In a very real way, Franklin Roosevelt saved capitalism from itself.

Now the cons are working as hard and as fast as they can to take Roosevelt's programs apart. "Roosevelt is dead!" Rush Limbaugh declared. "His programs live on, but we're in the process of doing something about that as well."

We can push back against the cons and revitalize the American middle class by resetting the rules of the game of business, by implementing economic stimulus programs and restoring progressive taxation, and by supporting national health care and free public education that extends all the way through college.

The cons' willingness to make sure the rest of us stay poor and unhappy is well documented. On the front page of the
Wall Street Journal
on January 27, 1997, the newspaper that represents the voice of what it calls the "investor class" pointed out how con and former Federal Reserve Board chairman Alan Greenspan saw one of his main responsibilities to be maintaining a high-enough level
of worker insecurity that employees wouldn't demand pay raises and benefit increases:

Workers' fear of losing their jobs restrains them from seeking the pay raises that usually crop up when employers have trouble finding people to hire.

Even if the economy didn't slow down as he expected, he [Alan Greenspan] told fed colleagues last summer, he saw little danger of a sudden upturn in wages and prices.

"Because workers are more worried about their own job security and their marketability if forced to change jobs, they are apparently accepting smaller increases in their compensation at any given level of labor-market tightness," Mr. Greenspan told Congress at that time.
³

The Founders of this nation are spinning in their graves.

Thomas Jefferson, the founder of the Democratic Party, did not want business to profit at the expense of We the People. The democratic government he was creating was designed to function for the benefit of the people and not the benefit of business. He wrote in 1816 in a letter to Samuel Kercheval:

Those seeking profits, were they given total freedom, would not be the ones to trust to keep government pure and our rights secure. Indeed, it has always been those seeking wealth who were the source of corruption in government. No other depositories of power have ever yet been found, which did not end in converting to their own profit the earnings of those committed to their charge.

It is a founding principle of the United States of America that government has both the right and the responsibility to set the rules of business. Jefferson, in an 1816 letter to William H. Crawford, wrote, "Every society has a right to fix the fundamental principles of association." If you want to create a business that deals with the public, you have to abide by the public's rules.

Markets are a creation of government, just as corporations exist only by authorization of government. Governments set the rules of the market. And because our government is of, by, and for We the People, those rules have historically been set to maximize the public good resulting from people's doing business.

Government can set the rules of the game of business in such a way that working people must receive a living wage, that labor has the power to organize into unions just as capital can organize into corporations, and that domestic industries can be protected from overseas competition. When these rules are combined with a democratic form of government, a strong middle class will emerge.

When government gives up this rule-making function, the middle class vanishes and we return to the cons' Dickens-era form of economics, where the rich get richer and the working poor are kept in a constant state of fear and anxiety so the cost of their labor will always be cheap. And democracy dies.

Jefferson knew that some people would prefer that government not play the role of referee. He knew that free marketeers (yes, they existed back then) would not want to accept rules designed to protect labor or the commons or the public good. Too bad, he said. We the People write the rules of business to eliminate "dangers which the society chooses to avoid." If corporations don't like the rules, we must "say to all [such] individuals, that if they contemplate pursuits beyond the limits of these principles, . . . they must go somewhere else for their exercise; that we want no citizens, and still less ephemeral and pseudo-citizens [like corporations], on such terms."

Jefferson told Kercheval:

I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom. . . . We must make our election between economy and liberty, or profusion and servitude. . . . [Otherwise], as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, . . . and the sixteenth being insufficient to afford us
bread, we must live, as they now do, on oatmeal and potatoes; have no time to think, no means of calling the mismanagers to account; but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow sufferers.

If the United States allowed a totally "free" market where corporations reigned supreme, according to Jefferson, America would become just like the oppressive governments of old, transformed

until the bulk of the society is reduced to be mere automatons of misery, to have no sensibilities left but for sinning and suffering. Then begins, indeed, the
bellum omnium in omnia
[the war of all with all], which some philosophers observing to be so general in this world, have mistaken it for the natural, instead of the abusive state of man.

As Jefferson realized, with no government "interference" by setting the rules of the game of business, there will be no middle class. And without a middle class, democracy won't survive.

Ronald Reagan's favorite punch line was: "I've always felt the nine most terrifying words in the English language are 'I'm from the government and I'm here to help.'"

Sure, it's easy to laugh along and think that government is bad—until you need government. Until you've been taken advantage of and want to use the government court system, or you get old and sick and need Medicare, or your house catches fire and you'd like your local fire department to come by and put it out.

Reagan often used to say that the government is stealing your money. The cons love that mantra: "It's your money."

Nobody
likes
to pay taxes. And nearly three decades of deceitful PR convincing Americans that there's no need to invest in our nation—and, thus, no need to pay for it with taxes—has left us with an electorate that so hates the word
tax
that cons can use it to turn voters against almost anyone advocating any government
program. If you're a politician and someone calls you a "tax-and-spend liberal," that generally means "good-bye to your votes."

The cons exploit this with the "It's your money" lie. "It's
your
money, and the liberals want it!" shout cons on the radio. They're talking about taxes, of course. But are our tax dollars really "our" money?

If I walk into a 7-Eleven store with a dollar in my pocket and say, "Gee, I'd really like that Hershey bar," and if I tear it open and take a bite out of it, that Hershey bar now belongs to me. And that dollar belongs to 7-Eleven,
even though it's still in my pocket.
It's pretty simple. As soon as I used the candy bar, I'd entered into an agreement to pay for it. It's a form of a contract even though I've never signed anything with a convenience store in my life. It's not my money anymore, even though it's still in my pocket, once I take possession of the candy bar.

We make an agreement by staying in this country that we will live by its rules.

I get up in the morning and the lights come on because my government is regulating the local utility for both safety and reliability. (FDR had to
force
electric utilities to serve many communities—thus the Rural Electrification Administration.) I open the tap to brush my teeth, and the water is pure because my government has purified it and delivered it to me from miles away in a safe fashion. The toothpaste I use isn't poisonous because the government passed laws that make it possible for aggrieved consumers to sue if they're harmed. Its ingredients are listed because the government requires it.

When I drive to work, the streets are paved by my government, and the streetlights work because my government planned them right and keeps them in good working order. The radio station where I broadcast from can do business because my government provides a stable currency and a framework of contract laws that allow a corporation to exist and function. The food I eat for lunch at a nearby restaurant is safe both because it was inspected at
its source by the U.S. Department of Agriculture and because the local government checks our restaurants for sanitary conditions. I can eat without worrying that bandits are going to run into the restaurant and demand everybody's wallet because the police are on the job. And I can go about my day without worrying that we'll be bombed by invaders from another country because the State Department and the U.S. Army both negotiate and protect our nation. With a little bit of thought, you can add dozens of other things to this list—all provided with taxpayer dollars.

Living in this society and using these services is like picking up and biting into the Hershey bar at the 7-Eleven: I've agreed to pay for them because I live here and I use them. The form of my agreement is called taxes. Therefore the money from my paycheck that goes to pay my taxes is
not
my money. It's the money I owe to cover the cost associated with the things I use each and every day. To suggest that it's "my" money is to spit in the face of our Founders—to suggest that somehow each of us is above and separate from the social contract we've all agreed to by living in this great nation.

When the cons say, "It's your money," what they really mean is that they don't believe in the social contract. They don't believe in paying for the services we use every day or in taking care of the poor and the sick and the elderly who can't take care of themselves. They are anti-American, anti-democracy, anti-Christian (and anti-Jewish and anti–every other major religion) zealots. They are a danger to our democracy and our country.

Progressive taxation has a long history. Jefferson advocated for progressive taxation in his letters to James Madison back in 1784 and 1785: "Another means of silently lessening the inequality of property," Jefferson wrote, "is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise." In short, Jefferson said, "Taxes should be proportioned to what may be annually spared by the individual."