UNAWARE WARFARE: Class Struggle in Modern America

There’s class warfare, all right, but it’s my class, the rich class, that’s winning. _______Warren Buffett

The culture wars give the oligarchs, both Democrats and Republicans the cover to continue the pillage. _______ Chris Hedges

Socialism never took root in American because the poor there see themselves not as exploited proletariat, but as temporarily embarrassed millionaires. ________ John Steinbeck

“The devil’s greatest trick is convincing us that he does not exist”. US Elites continue to strive to convince us that if they do exist, they earned it fair and square. Moreover, there is nothing to stop us from joining them and certainly NO class warfare on their part, at least. All the while they have engaged in an unrelenting guerilla war to reallocate the wealth upward, and exclude most Americans from access. Hence to paraphrase Warren Buffett, it is only the rich who have been wagging the class war, and for most part, the masses have never really been in the fight. For the past few decades, we’ve been completely distracted by ginned-up culture wars (race, religion, gender, etc.) that pit us peasants against one another. While the real forces in this saga remain largely ignored.

Obviously, there are a substantial number of corporate executives, bankers, and other wankers, as well as their extremely well-paid politicians (in both parties) to blame for this perpetual war on the American people. Not to mention there are the various dynastic rentiers and new instant Robber Barons of the tech sector. But from my prospective the real Schutzstaffel were the high priest apologists for our predatory political economy, and their various roadies and toadies. At the top of this list are Novelist Ayn Rand, Professor Milton Freedman and his Mont Pelerin Minions, Judges Lewis Powell and Robert Bork, and Federal Reserve Chairs Alan Greenspan and Ben Bernanke.

Going Off the Rails

When I was a youth (1950s-60s), with very low or zero university tuition, the GI Bill, strong labor unions, enforced financial regulations, and a progressive tax rate that peaked at over 90%, we were as close to as we’ve ever been to a “classless society” (if you happened to be white and male, of course). But that all ended when, among other things, a small, well-funded, and deeply ideological cult, known as neoliberals (actually neofeudal) economists captured the discipline and spread their elite apologia to the halls of power. While the political economy has always been rigged in favor of the 1%, since the 1970s the rigging had become completely unabashed and exploding in all directions. The steady onslaught to unravel all the reforms of FDR and his New Deal, culminated with tearing down the fire wall (Glass-Steagall) between commercial and investment banking. In the process the real (main street) economy has been almost completely set aside in favor of “phantom” hyper-financialized wealth (Wall Street).

The standard operating procedures of our present political economy were specifically designed to pander to plutocrats and ignore kleptocrats. Regressive tax policies (riddled with loopholes for the rich), weak anti-trust and labor law enforcement, were coupled with policies that paid firms to move their factories to foreign lands and so-called “right-to-work” regions of the US. The “countervailing power” of organized labor was decimated. But the greatest blow came via the deregulation and enhanced indemnification of banking. Dude where are our bailouts? They even changed bankruptcy laws to make things like student loans, non-dischargeable; while serial grifters, like Trump, use bankruptcy on a regular basis. All of this pandering to the upper class proceeded under the cloak of free market rhetoric, when in reality we only have free enterprise for the poor amid unbridled socialism for the rich.

Meanwhile, we made any discussion of CLASS a tabu topic. Fictitious Horatio Alger stories contended that everyone with a bit of initiative could rise from rags to riches. But what really happened post-WWII, was the US became a vast Imperial Power and remnants of the New Deal made it easy to share the prosperity that accrued to the only intact industrial economy. We were the first nation to give the blue-collar workers middle class status. When I was a junior professor at the University of Michigan in the 1970s, assemble-line workers in nearby Detroit had a higher standard of living. But, as famed business scholar and self-proclaimed “social ecologist”, Peter Drucker (another product of “Red Vienna”, like Polanyi and von Hayek) tried to warn us that this halcyon era was a total aberration. Middle Class in Europe meant shop keepers and professionals. Only in the US was everyone in the middle, but only for a few decades following WWII.

Even Drucker’s new managerial class, with its outrageous remuneration and myopic mission of only “increasing shareholder value”, would soon be left in the dust by the Money Managers and Technocrats, and the radical revival of the Rentier Class (those who “acquire unearned wealth in their sleep”). The hyper-financialized economy moved us from one huge asset bubble to next, and when they inevitably burst, it was mostly the average American left holding the proverbial bag. In the midst of our ponderous Ponzi scheme with its perpetual motion printing press (note: https://daneke.medium.com/it-is-the-banking-stupid-1ec1345478d7) the pace of Middle Class decline quickened. In the meantime, most of the ladders of upward mobility were systematically taken away. This unprecedented level of “dispossession” was actively aided and abetted by every administration from the Gipper to the Pussy Grabber.

Augmented Unawareness

When the one of greatest economists of all time, Thorstein Veblen, chronicled our previous “Gilded Age” he identified “pecuniary emulation” (and immolation) and “conspicuous consumption” as driving forces. Likewise, during our era, it is the drive to “keep up with our Joneses” (and Kardashians) and the myth of the American Dream that turned most of us into DEBT SERFS. Many are literally living from dwindling paycheck to paycheck and paying usurious interest and penalties upon ever-growing mountains of debt. Moreover, many of us were forced to join the “precariat” (the precariously employed proletariat), with no benefits in the burgeoning “on-demand economy” (from adjuncts and temps to Task Rabbits and Uber drivers), with little life beyond chasing down their next gig. Yet, most Americans are totally unaware of how beaten-down we’ve become, and still hold-out hope that they’ll somehow win the rigged lottery of life.

Most Americans have no idea what proletariat (essentially working class) means, and in the era of rapid de-industrialization, off-shoring, and union busting it means less and less. They do have a vague and festering feeling that their birth right has been compromised, nevertheless, they tend to blame scapegoats among their own class. When the working class “Yellow Jackets” took to the streets in France, they were quickly dismissed as xenophobic, homophobic and antisemitic. As often as not, many displaced and associated Americans are less “lumpenproletariat” (rabble who are rabidly anti-proletarian) and more LUMPENBOURGEOISIE. In essence, they are wannabes who have somehow reconciled themselves to living in a “Banana Republic” (ruled by shifting and shiftless kleptocrats). Either way, most Americans are their own worst enemies where class is concerned.

Galactic Scale Ignorance and Inequality

Americans are not only unaware of the mounting class warfare; they have little understanding of how truly monstrous the level of inequality has become. More importantly perhaps, after being assured by captured economists that inequality is some sort of innate natural process, they are oblivious to how much of it is the actually a product of purposeful policy choices. Average workers cannot tell you how many zeros are in a billion (9) or how many days the average corporate executive must work to earn as much as they would in a lifetime (65). They might be able to tell you that 8 individuals hold as much wealth as half the planetary population, but I doubt they really comprehend what that means. The world may never have been so out-of-whack (maybe ancient Egypt).

Professor Jamie Galbraith (filling the shoes of his illustrious father, John Kenneth) tells us that this level in inequality is completely “unsustainable”. The more we use financial skullduggery and militarization to ignore fundamental and finite resource constraints the worse the inequality will grow. Not to mention that Capitalism will simply seize up when wealth is concentrated in too few hands. While more arcane perhaps, complexity theorists have demonstrated that growing inequality, enabled by policy changes that began in the late 1970s, has completely disrupted the remaining self-balancing mechanisms of the economy. Hence, the more we let self-aggrandizing sociopaths call the shots and ignore systemic risks, the much more likely we will experience cascading and uncontrollable collapse.

Aside from their delusional aspirations, Americans generally accept a certain level of inequality. However, most have little idea how vast are the disparities. Famed behavioral scientists, Dan Ariely, reporting on his team surveys, found that respondents were mostly clueless. They asked respondents to tell them what they thought the level was as well as what they thought it should be. Assuming that most were brain-washed that that top 20% had earned their wealth by individual effort, respondents would like to reward them as much as 30% of the pie. But in fact, they take nearly 90%. Meanwhile upward mobility has slowed to a trickle, so that if one is born into the bottom 40%, they mostly remain there, except for those who fall further into the very bottom quintile (no pie at all for them). Phillip Alston, Special Rapporteur on Extreme Poverty to the UN Commission on Human Rights, visited the United States in the fall of 2017 and concluded that those who fall into that bottom 20% experience the greatest loss of basic human rights than those of any of the other developed nations. Can you spell b-a-n-a-n-a-s?

We were all ready headed into another recession, in real growth, given residual effects of the financial crisis of 2008 (which is still on life-support), and it is likely to be even more protracted and devastating as result of the pandemic. 1000s businesses and 100s of 1000s of jobs may never return. Yet, a hand full of American oligarchs have already collectively added over another trillion (12 zeros) to their personal wealth from 8 months of our ill-managed health crisis. Worse yet, the lion’s share of general relief funding (e.g., CARE Program) went to wealthy individuals and their bogus foundations. Not to mention the million plus dollar checks that went to mega-churches and their gold-plated pastors.

Perhaps it is time for us serfs to wake up and smell the monetary napalm. We were exceedingly fortunate to has escaped the oligarch riddled reign of King Donald. We now have to opportunity to hold the new administration’s feet to fire of our hazy awareness of a broken economy and societal silos, even if we don’t fully understand the underlying class warfare being waged against us. Task Rabbits unite, you have nothing to lose but your tails (and fairy tales).

The Biden team, of course, is beholding to their own oligarchic idols. One analyst recently observed that our new president has “the most diverse cabinet in the history of Goldman Sachs”. Meanwhile, major portion of the ruling class will still seek to divide and conquer us with more fake culture wars and by fueling of the flames of race, gender, and ethnic hatred. Our toxic white supremacy entitlement syndrome still provides a facile smokescreen for our self-proclaimed Nietzschean ubermenschen. These times are overly ripe for many of these subtle and subliminal anti-democratic forces to become full frontal fascism. Trump sought generate a frenzy of fear regarding BLM and the ANTIFA, which while occasionally misguided, are hardly terrorist groups. The real terrorists in our society are those who seek to stifle the peaceful resolution of our class conflicts.

When I was kid there was TV show called The Millionaire, where each week an anonymous tax-free gift of 1,000,000 dollars would completely change a different fictionalized character’s life (often for the worse). Now that amount will barely change your underwear (for life). Obviously, the cost of living has skyrocketed, while the income of most American’s has remained stagnant or declined. The major source of wealth, home ownership, was ripped-away from many during the recent financial crises. Higher education, another pathway, is now a mine-field, as student debt retards earnings potential. This presidential transition is an ideal time to recognize these casualties of our elite launched class war — SERFS UP!

Gregory A. Daneke, Professor Emeritus, School of Business, Arizona State. Other teaching posts: Michigan & Stanford. Gov. service: GAO, DOE, and White House.

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