Fighting Back
When cons took over the United States during Reconstruction after the Civil War and held power until the Republican Great Depression, the damage they did was tremendous. Our nation was wracked by the classic scourges of poverty—epidemics of disease, crime, and riots—and the average working person was little more than a serf. The concepts of owning a home, having health or job security, and enjoying old age were unthinkable for all but the mercantile class and the rich. America seemed to be run for the robber barons and not for the thousands who worked for them. Democracy in America was at its lowest ebb; our nation more resembled the Victorian England that Charles Dickens wrote of than the egalitarian and middle-class-driven democracy that Alexis de Tocqueville saw here in 1836.
All that changed in the 1930s, when Franklin D. Roosevelt’s New Deal brought back the middle class. His economic stimulus programs put money in people’s pockets, and the safety nets he created—like Social Security—ensured that no one would fall out of the middle class once they had gotten there. His programs worked, creating what has been called the Golden Age of the middle class. During these years, from the 1940s until Reagan took power, democracy in America resurged along with the middle class.
But after 40 years of prosperity, in the 1980s Americans began drinking the cons’ Kool-Aid with startling rapidity. Three “conservative” Republican presidents and one “conservative” Democrat have crushed the middle class and brought our nation to the brink of a second Great Depression.
In 2005 the US trade deficit hit an all-time high at a whopping $725.8 billion. Over the past five years, the US economy has experienced the slowest job creation since the 1930s, with fewer private-sector hours worked in 2005 than in 2001. For the first time since the Great Depression, in 2005 American consumers spent more than they earned, and the government budget deficit was larger than all business savings combined.8 We are financing today’s consumption with tomorrow’s bills, and sooner or later the chits will come in and the middle class will be the big losers—putting democracy itself at risk again.
The way out of this mess isn’t difficult to understand—we’ve done it before. Remember that businesses are run like kingdoms, with CEO kings, executive princes, and worker serfs, so they’re essentially anti-democratic. Avoiding the cons’ scenario simply requires us to remember that a middle class won’t emerge when business has more influence in the halls of government than do We the People. Without democracy there can be no middle class; and without a middle class, democracy will wither and die.
Whether our economy benefits billionaires or the rest of us is determined by how we handle economic policy. It depends especially on a fundamental grasp of two concepts: classical economics and an internal government-spending stimulus.
Classical Economics
For more than 200 years—until Ronald Reagan became president—economics was not hard to understand. Everyone could figure out that when working people have money, they spend most of it. When extremely wealthy people have money, they save most of it. It’s the spending of money by working people that creates consumer demand. Consumer demand in turn creates business opportunities, and that creates jobs.
In 1981 Reagan introduced America to trickle-down economics, also called (by George H. W. Bush, who understood classical economics even though he later had to placate the con base) “voodoo economics.” Reagan’s concept, in a nutshell, was that if we reorganized society so that the wealth of the rich grew suddenly and quickly, they’d use that money to build factories and hire more people, thus allowing their wealth to “trickle down” to the workers.
This assertion of Reagan’s was new—it had never before happened in the history of the world. Certainly, small groups of political and/or economic elites had concentrated wealth at the expense of society generally, but none had ever before said they were doing it because economics justified it. Kings throughout history had simply claimed the divine right of kings.
Even though voodoo economics had never been tried, Reagan was able to convince average Americans that it would work, and got it pushed through Congress. (Members of Congress saw it for what it was, but so did their wealthy contributors who would benefit from it, so Republicans and a few sellout “conservative” Democrats in Congress went along.) To institute his voodoo economics, Reagan slashed top marginal income tax rates on millionaires and billionaires from 70 percent to 50 percent in 1981 and all the way down to 28 percent by 1988.9
The result wasn’t at all what Reagan expected. Rather than create income, the Reagan tax cuts dropped the United States into the greatest debt in the history of the world. Reagan turned to his conservative friend Alan Greenspan, who suggested that Reagan could hide part of the debt by borrowing a few hundred billion dollars a year from the Social Security Trust Fund.10 Reagan followed Greenspan’s advice, which is why we have a Social Security crisis today: the government borrowed all the money in the fund from 1982 to today to help cover the voodoo economics budget deficit; and now, to pay back Social Security, income taxes—which hit millionaires and billionaires (unlike Social Security FICA taxes, which are taken only on the first $90,000 of income from working people)—rose substantially.
Additionally, as would be expected, the rich got fabulously richer under Reagan. From 1980 to 1990, the income of the wealthiest 5 percent of Americans rose by 25 percent while the income of the bottom 40 percent stayed absolutely flat.11 This is why the wealthiest in America didn’t use their money to build factories—after all, there wasn’t a significant increase in demand, so why manufacture things that people can’t afford? Instead this nation’s rich loaned some of their money to the US government so it could pay the bills Reagan was running up, getting it back over the ensuing 20 years with a healthy dose of interest, paid for by future taxpayers.
Although trickle-down economics did produce millions of jobs, they were almost all outside of the United States, while at the same time good US manufacturing jobs vanished. The only accomplishment of trickle-down economics was to produce a nation of peons.
The alternative is to return to classical economics. When working people have money to spend, they create a demand for goods and services, which allows entrepreneurs to start businesses to meet that demand. The entrepreneurs employ more working people, who then have more money to spend. The middle class grows.
Think about it. What would you do if someone gave you an extra $20,000? Maybe you would take a vacation or buy a new car, new clothes, or new appliances. Even if you used the money to pay off old bills, you would then have more to spend in the future because you wouldn’t have interest payments. And when you buy more, you create demand, which means more people can be put to work—and the economy grows.
Now think about what Bill Gates would do if someone gave him an extra $20,000—or an extra $20 million or more, as George W. Bush’s first tax cuts did. Would he even notice? He’d probably just send it along to his accountant and forget all about it. The only thing that’s going to grow is Bill Gates’s bank account. That’s the difference between giving money to the rich and giving money to you and me.
This economic truth is just common sense. When people in the lower and middle economic layers of society have increased income, all of society eventually gets richer because working people’s spending most of their incomes is the engine that creates economic demand for goods and services.
To bring back the middle class, we must reinstitute common-sense classical economics: we must pay a living wage to working people, protect US industries, and reinstate progressive taxation so the very wealthy pay a share of their income that reflects their heavier use of the commons and their increased access to the engines of wealth generation.
For more than 200 years, America was the wealthiest and most powerful nation in the world. Today—after nearly three decades of the cons’ economics and insane “free-trade” policies—we’re the most indebted nation in the history of the world.
We’ve gone from being—pre-Re
agan—the world’s largest exporter of finished goods and the world’s largest importer of raw materials to being—just over the past decade—the exact opposite. We used to import iron ore, make steel, make cars, and export them all around the world. Now Canadian and Mexican and German companies mine raw materials from mines they own in the United States, ship the ore to their nations or to China, manufacture the finished goods, and sell those goods back to us—with dollars we give them in exchange for another few hundred billion dollars’ worth of America every year.
There’s no reason to let the cons screw us over. We must not stand by while our democracy becomes a corporatocracy, serving an elite group of billionaire CEOs. There is another way—and we’ve done it before. Thomas Jefferson knew how to build a middle class. Franklin Roosevelt knew how. We can do it, too. We can re-create the America that built the middle class my dad entered, the middle class in which he raised me.
From Screwed: The Undeclared War against the Middle Class
by Thom Hartmann, © 2006, published by Berrett-Koehler.
Democracy Is Inevitable
From What Would Jefferson Do?: A Return to Democracy
IF DEMOCRACY IS THE NATURAL STATE OF ALL MAMMALS, INCLUDing humans, it must be something purely temporary that has prevented it for so much of the “civilized” period of the past few millennia (even though it has continued to exist throughout this time among tribal people). The force that slowed its inevitable emergence was a dysfunctional story in our culture, which led to thousands of years of the sanctioning of slavery, the oppression of women and minorities, and the deaths of hundreds of millions. It was the story that our essential nature is sinful.
The Fundamental Issue of Sin and Punishment
Thomas Hobbes and others have assumed that we’d need a time machine to know how bad life really was 20,000 or 50,000 years ago. But there are still humans living essentially the same way that your ancestors and mine did, and if we look at their lives we find, by and large, that Hobbes was mistaken.
I remember vividly the first time I experienced this. I was sitting around a campfire with half a dozen or so men who were members of a southwestern Native American tribe. We’d just done a sweat, and after some of the heavy talk and ritual associated with that sacred ceremony the conversation gradually turned to “guy talk”: telling stories, making each other laugh, and poking fun.
They were making jokes mostly about another tribe, which lived about 600 miles away. Not cutting or hurting comments but jokes that pointed out—with a humor born of respect—the historic and cultural differences between the two tribes. Because I’d never interacted with the other tribe, I made a comment typical of modern American culture: a put-down joke, with the man sitting opposite me around the fire as its butt. It was the kind of remark you’ll hear within five minutes of turning on any sitcom on American television.
The group fell silent, and everybody looked down or into the fire. I realized I’d had breached some protocol. And I didn’t know how to make it right or how they’d punish me for my sin.
After a long and, for me, uncomfortable silence, the oldest man in the circle roused himself, as if he knew that his age gave him the obligation to speak first.
“I remember a time when I was young,” he said, “and, well, I won’t say, ‘stupid,’ but let’s say, ‘not so wise.’ Not that I’m all that wise now,” he added with a small laugh,
but I’ve learned a few things over the years. Anyhow, I remember when I was young and I was sitting with some friends, and I said something hurtful about one of the men who was there with us. I remember how badly I felt, immediately knowing that I had put a pain on his heart. I remember how confused I felt, not sure what I should do to restore balance to the circle. And I remember one of the men telling a story of a time when he’d hurt somebody’s feelings, and how he’d made it right by acknowledging that, and retracting the comment, and asking the rest of the group to help him bring back balance and harmony.
The man spoke for several minutes, and my version of it is from memory so probably not exact, but it captures the essence of his comments. He was teaching me—without ever once mentioning my name—how to remedy what I had done.
Then the man next to him cleared his throat and said, “I too remember a time I said something impulsive that hurt my friend.” And he went on to tell the story of what he did to make it right. His story was followed by one from the man I’d made the joke about, and this continued all the way around the circle until it got to me.
By then I knew how each person felt and had learned how I could make it right with each individual or rebalance the situation in the group. It took a few minutes, but I did it, and the oldest man gently interrupted me by hand-rolling tobacco into a corn shuck, lighting it, and passing it around the circle. It was as if something heavy had been lifted from the group. We were soon again laughing and telling tall tales.
What’s important in this story is that nobody had called me a sinner. Nobody implied that I was doing what was normal or natural. Everybody accepted that I’d made a mistake, I hadn’t known better, and each man had done his best to politely tell me how I could restore harmony.
This is one aspect of how a society can live without police and prisons.
This is how humans, for the most part, lived for the past 40,000 years and longer.
This is beyond the imagining of Thomas Hobbes and the people of his day who were struggling in a largely anti-democratic kingdom with the issue of whether those who rule over others—restraining sinful impulses and punishing those who err—should be appointed by gods or men (but never women).
When society agrees with the story that people are fundamentally flawed and evil, it creates repositories for those evil people or puts them to death. It assigns to some of its members the job of human trash collector who performs therapy, provides drugs, or restrains them. If they acted badly enough, they’re put into a prison, where it’s assumed that others of equal evil and lacking restraint of their human nature will bully, beat, and even rape the newcomer.
On the other hand, when a society agrees with the democracy-grounded story that people are fundamentally good, born in balance with the world and one another, something quite different happens when a person acts badly. It becomes the responsibility of the entire community to bring that person back into balance. The bad behavior is seen either as an indication that the person has not yet learned something or matured or that the person is suffering from a form of spiritual sickness. The solemn responsibility and work of every person in the community becomes that of teaching or healing the individual. Usually, once harmony is restored, a small ceremony is performed to acknowledge the return of the person and the community to its natural state.
Some would argue that this way of life may work well for small tribes where everybody knows everybody else but isn’t viable in a city-state society where it’s possible for predators and sociopaths to prey on innocent people if unrestrained by the force of law and threat or reality of imprisonment. There’s considerable truth to this argument: Hobbes was writing from the midst of the British Empire in the seventeenth century, the belly of the beast of one of history’s mightiest and most bloodthirsty anti-democratic cultures to rule the earth.
And yet we do have this simple metric today: generally, the more democratic a nation is, the fewer people it will have in prison.
Democracy Is Resilient, Always
Rising from the Human Spirit
Most scientists who have examined the relationship between democracy and biology have concluded that democracy is so resilient an idea, so biologically ingrained an imperative, that it will continue to grow and prosper around the world even if the Texas oil barons and the New York corporations do succeed in turning America back into a Dickensian world consistent with the vision of dictators, pseudo-conservatives, and those who don’t understand democracy.
Professor Rudolph Rummel made the following points in an e-mail discussion we had in November 2003
:
■ Freedom is a basic human right recognized by the United Nations and international treaties and is the heart of social justice.
■ Freedom—free speech and the economic and social free market—is an engine of economic and human development and scientific and technological advancement.
■ Freedom ameliorates the problem of mass poverty.
■ Free people do not suffer from and never have had famines and, by theory, should not. Freedom is therefore a solution to hunger and famine.
■ Free people have the least internal violence, turmoil, and political instability.
■ Free people have virtually no government genocide and mass murder and for good theoretical reasons. Freedom is therefore a solution to genocide and mass murder, the only practical means of making sure that “Never again!”
■ Free people do not make war on one another, and the greater the freedom within two nations, the less violence between them. While they may declare war on autocratic regimes that threaten them, people in a democracy never vote to attack other democracies.
■ Freedom is a method of nonviolence—the most peaceful nations are those whose people are free.
As Per Ahlmark, former deputy prime minister of Sweden, said in his remarks to the European Parliament on April 8, 1999: “In a democracy it is impossible, or at least extremely difficult, to get enough support from the people to initiate a military confrontation with another democracy. Such people know each other too well. They trust each other too much. For democratic governments it is usually too easy and natural to talk and negotiate with one another—it would look and feel ridiculous or totally irresponsible to start shooting at a nation which is governed in the same way as your own country.”1
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