Capitalism: The Nightmare

TD ORIGINALS
A worker in a costume representing world capitalism during a 2017 May Day rally in Jakarta, Indonesia. (Dita Alangkara / AP)

The neoliberal, arch-capitalist era we inhabit is chock-full of statistics and stories that ought to send chills down the spines of any caring, morally sentient human. Nearly three-fourths (71 percent) of the world’s population is poor, living on $10 a day or less, and 11 percent (767 million people, including 385 million children) live in what the World Bank calls “extreme poverty” (less than a $1.90 a day). Meanwhile, Oxfam reliably reports that, surreal as it sounds, the world’s eight richest people possess among themselves as much wealth as the poorest half of the entire human race.

The United States, self-described homeland and headquarters of freedom and democracy, is no exception to the harshly unequal global reality. Six of the world’s eight most absurdly rich people are U.S. citizens: Bill Gates (whose net worth of $426 billion equals the wealth of 3.6 billion people), Warren Buffett (Berkshire Hathaway), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook), Larry Ellison (Oracle) and Michael Bloomberg (former mayor of New York City). As Bernie Sanders said repeatedly on the campaign trail in 2016, the top 10th of the upper 1 percent in the U.S. has nearly as much wealth as the nation’s bottom 90 percent. Seven heirs of the Walton family’s Walmart fortune have among them a net worth equal to that of the nation’s poorest 40 percent. Half the U.S. population is poor or near-poor, and half lacks any savings.

Just over a fifth of the nation’s children, including more than a third of black and Native American children, live below the federal government’s notoriously inadequate poverty level, while parasitic financiers and other capitalist overlords enjoy unimaginable hyper-opulence. One in seven U.S. citizens relies on food banks in “the world’s richest country.” Many of them are in families with full-time wage-earners—a reflection of the fact that wages have stagnated even as U.S. labor productivity consistently has risen for more than four decades.

Failure by Design

These savage inequalities reflect government policy on behalf of “the 1 percent” (better, perhaps, to say “the 0.1 percent”). U.S. economic growth since the late 1970s has been unequally distributed, thanks to regressive policy choices that have served the rich and powerful at the expense of ordinary working people. As Joshua Bivens of the Economic Policy Institute showed in his important 2011 study, “Failure by Design,” the following interrelated, bipartisan and not-so-public policies across the long neoliberal era have brought us to a level of inequality that rivals the Gilded Age of the late 19th-century robber barons era. These policies include:

● Letting the value of the minimum wage be eroded by inflation.
● Slashing labor standards for overtime, safety and health.
● Tilting the laws governing union organizing and collective bargaining strongly in favor of employers.
● Weakening the social safety net.
● Privatizing public services.
● Accelerating the integration of the U.S. economy with the world economy without adequately protecting workers from global competition.
● Shredding government oversight of international trade, currency, investment and lending.
● Deregulating the financial sector and financial markets.
● Valuing low inflation over full employment and abandoning the latter as a worthy goal of fiscal and economic policy.

These policies increased poverty and suppressed wages at the bottom and concentrated wealth at the top. They culminated in the 2007-09 Great Recession, sparked by the bursting of a housing bubble that resulted from the deregulation of the financial sector and the reliance of millions of Americans on artificially inflated real estate values and soaring household debt to compensate for poor earnings.

After the crash, the government under both George W. Bush and Barack Obama bailed out the very financial predators who pushed the economy over the cliff. The Obama administration, populated by Goldman Sachs and Citigroup operatives, left the rest of us to wonder “Where’s our bailout?” as 95 percent of the nation’s new income went to the top 1 percent during his first term.

Ordinary Citizens Have No Influence Over Their Government

All of this and much more is contrary to technically irrelevant American public opinion. But so what? You don’t have to be a leftist to know that the United States’ political order is a corporate and financial plutocracy. Three years ago, liberal political scientists Martin Gilens of Princeton University and Benjamin Page of Northwestern University determined that the U.S. political system has functioned as an oligarchy over the past three-plus decades, in which wealthy elites and their corporations rule. As Gilens explained to the liberal online journal Talking Points Memo, “Ordinary citizens have virtually no influence over what their government does in the United States.”

Shock Profits

Most of this results from the normal, business-rule-as-usual operation of the American political process. Sometimes—as during “natural disasters” such as Hurricanes Katrina, Harvey and Irma—crisis moments allow wealthy interests to rack up huge profits almost overnight while much of the population is too shocked and distracted to respond. As Susan Zakin notes in the Los Angeles Review of Books, “Handing out billions for hurricane reconstruction will shore up [Donald] Trump’s faltering support on Wall Street and among major corporations profiting from a bonanza expected to top $100 billion.” Katrina provided precisely such a business opportunity to corporate America. So did the U.S. invasion of Iraq.

‘Isn’t It Beautiful?’

At the same time, Houston, for instance, is a much bigger scene of devastation than it would be but for business-rule-as-usual. The city was recklessly built up by and for elite financial and real estate interests and their governmental tools without the slightest concern for environmental sustainability and resilience. As Zakin notes:

[W]ithout a zoning code, [Houston is] a case study in urban sprawl. Houston was built on a dry (read: low-lying) lakebed that’s laced with bayous. The bayous are lined with concrete, steel and sheet metal, which is functional when it rains a little, but a contender for the luge event when it rains a lot, even in posh neighborhoods like River Oaks. Doing what it takes to prevent flooding, widening bayou channels, managing growth, putting in green space, might impede the only truly important flow: money. Houston’s city fathers have resisted any effort to plan for climate change, because, well, it doesn’t exist. As if that weren’t enough, parts of Houston are sinking, some as much as 2.2 inches a year.

It’s an epitome of the deadly “free market” chaos favored by arch-capitalist political actors such as the right-wing billionaire Charles Koch and his friend, the “libertarian” Sen. Jeff Flake, R-Ariz. In his recent, widely read book, “Conscience of a Conservative,” Flake writes with fondness about the time he met the eminent neoliberal University of Chicago economist Milton Friedman:

We picked him up at the airport, and while we were driving to a suburb of Phoenix we went through what could only be described as suburban sprawl. Someone in the car with us, remarking on this landscape, said, ‘Man, it looks like there was no planning at all.’ Friedman just nodded his head and said, ‘Yes, isn’t it beautiful?’ … [I]t wasn’t government coercion that had brought it into being. It was the invisible hand of the free market. Planning requires control, control empowers government, and empowered government = disempowered individuals.

Houston is the “petro-metro,” a major capital of the petrochemical industry and home to numerous toxic waste sites. As a result, the city’s floodwaters are loaded with hazardous materials.

How beautiful.

The “free market” madness rolls on. Like the melting polar ice, which opens up new business opportunities for oil drilling and ship travel even as it reduces earth’s ability to reflect sunlight back into space, the devastation resulting from extreme weather is both a consequence of the rule of big corporations (the real masters of the “free market” since the early 20th century in the U.S.) and a perverse opportunity for quick corporate profits.

On Aug. 15, 10 days before Hurricane Harvey hit Texas, Donald Trump, himself a global real estate baron, wiped out an Obama-era executive ordermandating that federal reconstruction grants take account of sea-level rise and related aspects of climate change.

Capitalist Climate-astrophe

Meanwhile, speaking of climate change, anthropogenic—really, capitalogenic—global warming threatens to turn the venerable popular struggle for a more equal distribution of wealth into a fight over the slicing up of a poisoned pie. The signs of climate catastrophe are unmistakable. Record-setting wildfires raged on the nation’s West Coast, and a devastating drought plagued much of the nation’s northern Great Plains as Houston was sunk in epic, chemically polluted flooding and Irma bore down on Florida. Like Hurricane Sandy (which filled New York City subway tunnels with storm surge on the eve of the 2012 elections), the Indian and Pakistani heat waves of 2015, Hurricane Katrina (2005), the Alberta, Canada, wildfires of 2016 and numerous other recent, lethal, meteorological episodes, this extreme weather is intensified by the spiking balminess of the planet.

The warming is fueled by capital-captive humanity’s excessive release of carbon dioxide resulting from the profit system’s rapacious extraction and burning of fossil fuels and its reliance on animal agriculture. Carbon accumulates in the atmosphere, trapping heat and melting the world’s glaciers and permafrost, which holds vast reserves of carbon-rich methane. As the ice caps retreat, less sunlight gets reflected back into space and more of it heats the planet toward a point where it becomes uninhabitable.

Extreme weather is just the tip of the melting iceberg. If not reversed, global warming will destroy the human species through famine, dehydration, overheating, disease and resource wars. It has us on the path to hell.

‘A Death Knell for the Species’

Trump has taken advantage of the nation’s plutocratic political dysfunction to become a kind of one-man ecological apocalypse. The fossil-fueled hurricanes, drought and wildfires of 2017 have hit the U.S. at a time when the White House is occupied by an openly ecocidal billionaire whose election rang what Noam Chomsky called an environmental “death knell for the species.” Trump has pulled the United States out of the moderate Paris climate accord. He has removed all references to climate change from federal websites and chose a fellow petro-capitalist climate change denier dedicated to crippling the Environmental Protection Agency to lead that department. Trump’s secretary of state is the former longtime CEO of Exxon Mobil Corp., history’s most powerful fossil fuel corporation—a company that buried and then organized propaganda against its own scientists’ warnings on carbon’s impact on the climate. Trump’s proposed budget calls for a 16 percent cut to the National Oceanic and Atmospheric Administration, which monitors all things climate- and weather-related.

This is ecocidal petro-capitalist madness on steroids.

After Harvey nailed Houston and before Irma hit Florida, Trump held a chilling ecocidal rally in front of an oil refinery in North Dakota. He boasted of how he had exited the “job-killing” Paris agreement (“It was so bad”) and approved the planet-cooking and supposedly job-creating Dakota Access and Keystone XL pipelines.

“I also did Keystone,” Trump said. “You know about Keystone. Another other one, big one—big. First couple of days in office, those two—48,000 jobs.”

Trump said the White House was going to make North Dakota’s current terrible drought vanish because “we’re working hard on it and it’ll disappear. It will all go away.”

The president also asserted that the thousands of Americans who protested the Dakota Access pipeline within and beyond the Standing Rock Indian Reservation last year had no idea why they were against it.

It may have been his most absurd speech yet.

The System Is Working

Like so much else in U.S. government policy, Trump’s anti-environmental actions are contrary to majority-progressive public opinion. Who cares? It’s one more in a long line of examples showing that “We the People” are not sovereign in the failed, arch-plutocratic and militantly capitalist state that is the 21st century United States.

Many Americans find this difficult to process because they have been taught to foolishly conflate popular self-governance with capitalism—what the George W. Bush White House called “a single sustainable model for national success.”

This is a great lie. My old copy of Webster’s New Twentieth Century Dictionary defines capitalism as “the economic system in which all or most of the means of production and distribution … are privately owned and operated for profit, originally under fully competitive conditions: it has been generally characterized by a tendency toward concentration of wealth and, [in] its latter phase, by the growth of great corporations, increased government controls, etc.”

This definition does not mention any of the things routinely and inaccurately identified with capitalism in the dominant U.S. political and intellectual discourse: democracy, freedom, trade, job creation, growth and/or a “free market” that is characterized by widespread competition and/or little or no government interference. Capitalism is about profit for the owners of capital—period. They attain this through any number of means. The most damaging include:

● Seizing others’ land and materials.
● Slavery (the leading source of capital accumulation in the United States before it was outlawed in 1863–65).
● Firing workers or replacing them with technology.
● Undermining the value and power of labor by “de-skilling” workers by reducing the amount of knowledge and experience they need to do their jobs.
● Abject authoritarian tyranny in the workplace, where Marxist economist Richard Wolff reminds us that most working-age adults spend the majority of their waking hours.
● Outsourcing work to sections of the world economy with the lowest wages and the worst working conditions.
● Hiring and exploiting unprotected migrant workers.
● Slashing wages and benefits, or cheating workers out of them.
● Purely speculative investment.
● Forming monopolies and using them to raise prices.
● Dismantling competing firms, sectors and industries.
● Deadly pollution and perversion of the natural environment.
● Appropriating public assets.
● Military contracting and war production.
● Working to shape political and intellectual culture and policy in capital’s favor by funding political campaigns, hiring lobbyists, buying and controlling the media, manipulating public relations and propaganda, investing in the educational system, offering lucrative employment and other economic opportunities to policymakers and their families, holding key policymaking positions, and threatening to withdraw investment from places that don’t submit to capital’s rules while promising to invest in places that do.

When capitalism is understood for what it is really and only about—investor profit—there is nothing paradoxical about its failure to serve working people and the common good, much less the cause of democracy. If corporate and financial sector profits are high, the system is working for its architects and intended beneficiaries: capitalists. Its great corporations (now granted the legal protection of artificial personhood) are working precisely as they are supposed to under U.S. common law, which holds that (as Michigan’s Supreme Court ruled in Dodge v. Ford Motor Company in 1919), corporate “managers have a legal duty to put shareholders’ interests above all others and no legal authority to serve any other interests.”

The Growth Ideology

Environmental ruin lies at the heart of the system, intimately related back to class rule. As Le Monde’s former ecological editor Herve Kempf noted in his aptly titled 2007 book, “How the Rich Are Destroying the Earth,” the oligarchy sees the pursuit of material growth as “the solution to the social crisis,” the “sole means of fighting poverty and unemployment” and the “only means of getting societies to accept extreme inequalities without questioning them.”

“Growth,” Kempf explained, is meant to “allow the overall level of wealth to arise and consequently improve the lot of the poor without—and this part is never spelled out—any need to modify the distribution of wealth.”

Trump was channeling this deadly “growth ideology” in North Dakota. Sadly, growth on the current carbon-fueled capitalist model has put humanity—not to mention thousands of other sentient beings on earth—on the path to near-term (historically speaking) extinction. We are currently at 410 carbon parts per million in the atmosphere—60 ppm beyond what scientists identified as a hazardous point years ago. We are on pace for 500 ppm—a level that will destroy life on earth—by 2050, if not sooner.

‘Inclusive Capitalism’

“Capitalist democracy” is an oxymoron and a mirage. So is the curious notion of “inclusive capitalism”—a term taken up by the corporate right wing of the Democratic Party, including Hillary Clinton’s closest economic advisers, in 2015. This is the Orwellian name of a global “coalition” set up in 2014 by Lady Lynn Forester de Rothschild for super-wealthy elites to advance a “caring capitalism” that “works better for the broad base of society.” Lady Rothschild’s Coalition for Inclusive Capitalism started with what former Rep. Cynthia McKinney described as “a Working Group comprised of such luminaries of social justice as Sir Evelyn de Rothschild of E.L. Rothschild [a financial firm owned by a family worth an estimated $2 trillion], Dominic Barton from McKinsey and Company [$1.3 billion], Ann Cairns [annual salary of $5 million] of MasterCard, Sir Sherard Cowper-Coles of HSBC, Paul Polman [paid 10 million euros in 2014] of Unilever, along with CEOs of various pension plans and philanthropic foundations, like the eponymous Ford and Rockefeller foundations.”

According to one British media report, the Coalition for Inclusive Capitalism’s opening conference boasted a “guest-list … estimated to hold one-third of the world’s investable assets, around £18tr [nearly $25 trillion].”

One of the coalition’s leading speakers and champions is the great arch-neoliberal, former U.S. President Bill Clinton (with a net worth of $80 million)—a right-wing Democrat who did every bit as much to advance the Wall Street “free market” and globalist agenda as Ronald Reagan.

‘We Must Make Our Choice’

One does not have to be a Marxist or other variety of radical to acknowledge basic differences and conflicts between capitalism and democracy. D and capitalism have very different beliefs about the proper distribution of power,” liberal economist Lester Thurow noted in the mid-1990s. “One [democracy] believes in a completely equal distribution of political power, ‘one man, one vote,’ while the other [capitalism] believes that it is the duty of the economically fit to drive the unfit out of business and into extinction. … To put it in its starkest form, capitalism is perfectly compatible with slavery. Democracy is not.”

More than being compatible with slavery and incompatible with democracy, U.S. capitalism arose largely on the basis of black slavery in the cotton-growing states (as historian Edward Baptist has shown in his prize-winning study, “The Half Has Never Been Told: Slavery and the Making of American Capitalism”) and is, in fact, quite militantly opposed to democracy.

“We must make our choice,” the late Supreme Court Justice Louis Brandeis is reputed to have said or written: “We may have democracy in this country, or we may have wealth concentrated in the hands of a few, but we cannot have both.” This statement was unintentionally but fundamentally anti-capitalist. Consistent with the dictionary definition presented above, the brilliant, liberal, French economist Thomas Piketty has shown that capitalism has always been inexorably pulled like gravity toward the concentration of wealth into ever-fewer hands. In the U.S., as across the Western world, the tendency was briefly and partially reversed by the Great Depression and World War II, producing the long “middle class” Golden Age of 1945-1973. But that was an anomalous era, a consequence of epic economic collapse and two global wars. Capitalism has returned to its longue durée inegalitarian norm over the last four-plus decades.

And even before the onset of the neoliberal period, capitalism at its comparatively egalitarian and high-growth, post-WWII Keynesian best had already pushed livable ecology into crisis. It tipped the world into what leading earth scientists have designated a new geological era: The Anthropocene—a period when “human activities have become so pervasive and profound that they rival the great forces of Nature and are pushing the earth into planetary terra incognita … a less biologically diverse, less forested, much warmer, and probably wetter and stormier era.” The not-so-Golden Agebrought what sociology professor John Bellamy Foster called “a qualitative transformation in the level of human destructiveness.” If this ecological destructiveness isn’t tamed very soon, nothing that progressives and the left care about is going to matter much: Who wants to turn a poisoned world upside down?

Can environmental catastrophe be averted under capitalism? Not likely. Shifting from fossil fuel reliance and other unsound environmental societal habits and practices—built-in obsolescence, mass consumerism and the endless pursuit of quantitative economic growth, accumulation and “cheap nature” resource appropriation—requires a level of coordinated social and public intervention so extreme that it is incompatible with continued capitalist control of the means of production, investment and distribution. It requires an empowerment of ordinary people and a radical rehabilitation of the concept of the natural and social commons—things that very likely cannot be attained under the continued rule of capital. Stark as American activist Joel Kovel’s formulation may sound, I suspect he is right: “The future will be eco-socialist, because without eco-socialism there will be no future.”

Paul Street
Contributor
Paul Street holds a doctorate in U.S. history from Binghamton University. He is former vice president for research and planning of the Chicago Urban League. Street is also the author of numerous books,…
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US Census report shows increasing social inequality

Small median income gain offset by debt and living costs

By Eric London
15 September 2017

US Census data from 2016 released on Tuesday shows increasing social inequality amid a small gain in household income that is offset by a massive growth of personal debt and rising living costs.

The data tracks the ongoing redistribution of wealth from the working class to the wealthy as a result of the pro-Wall Street policies of both the Republican and Democratic parties. It substantiates the oligarchic character of the United States.

Social inequality

The Gini index, used to measure social inequality, with higher figures indicating a wider economic divide, rose slightly from 2015 (.479) to 2016 (.481). The 2016 figure, according to rankings in the CIA World Factbook, makes the US slightly more equal than Madagascar and less equal than Mexico.

In terms of aggregate income share, the shift from 2015 to 2016 is as follows:

Income share from 2015-2016. *Census data reported to one significant figure, meaning percent decline is not reflected in 2015 and 2016 share columns.

The growth in inequality is even starker when traced from 2007, the year before the Wall Street crisis.

The data reflects income and not wealth, thereby providing an incomplete and conservative indication of the scale of inequality. Even within the highest quintile, the income share increased only for the top 10 percent, and, in particular, the top 5 percent.

Income share from 2007-2016

Household income

The corporate media has portrayed the report as a sign of positive income growth, since it shows a slight rise in median income of 3.2 percent from 2015 to 2016.

But according to the Census data, the earnings of “full-time, year-round workers” remained stagnant. For men in this category, a total of 63.9 million people, earnings declined by 0.4 percent, from $51,859 in 2015 to $51,640 in 2016. For women in this category, 47.2 million people, there was a minor increase, 0.7 percent, from $41,257 in 2015 to $41,554 in 2016. In other words, families with 2 adults working full-time saw a paltry $78 increase in their yearly earnings from 2015 to 2016.

Claims of rising incomes mask the growth of inequality. The Census data shows that the household income of the 90th percentile (the 100th being the highest) was 12.53 times higher than the household income of the 10th percentile in 2016, up from 12.23 times higher in 2015 and 11.18 times higher in 2007. The degree to which income is concentrated in the richest 10 percent of the population is exemplified by the fact that the 5th percentile boasted a household income 3.82 times higher than the 50th percentile in 2016, up from 3.79 times in 2015 and 3.52 in 2007.

As Bloomberg News reported Wednesday, “Since 2007, average inflation-adjusted income has climbed more than 10 percent for households in the highest fifth of the earnings distribution, and it’s fallen 3.2 percent for the bottom quintile. Incomes of the top 5 percent jumped 12.8 percent over the period.”

For the working class, any income increase was transferred to the corporate elite in the form of rising debt payments and increasing living expenses, especially for health care.

According to figures from eHealth, a large private health exchange, average deductibles for families rose 5 percent from 2016 to 2017 (a year after the period covered by the Census report) and average individual premiums rose 22 percent over the same period.

The rising cost of student debt alone largely erases income increases seen by some young people. According to the Census, those aged 15 to 24 saw an income increase of 13.9 percent, from $36,564 in 2015 to $41,655 in 2016, while incomes for young people aged 25 to 34 rose 4.9 percent, from $58,091 to $60,932, nearly double the percentage increase for older age groups.

However, in 2016, student debt rose to an average of $30,000 per young person, up 4 percent from 2015, eliminating over 80 percent of the income rise for 25-34 year olds. For 15 to 24 year olds, the $4,000 increase in median income would hardly cover one sixth of the average debt payment, let alone make up for the fact that young people face a future in which they are unlikely to receive a pension, Social Security or Medicare.

Rising debt levels are not a phenomenon limited to young people. A Bloomberg report from August 10 notes that credit card defaults increased from the beginning of 2015—when roughly 2.5 percent of debt holders defaulted—to the end of 2016, when the total hit 3 percent. This figure subsequently climbed in 2017 to reach 3.49 percent.

Bloomberg notes: “After deleveraging in the aftermath of the last US recession, Americans have once again taken on record debt loads that risk holding back the world’s largest economy… Household debt outstanding–everything from mortgages to credit cards to car loans–reached $12.7 trillion in the first quarter [2017], surpassing the previous peak in 2008 before the effect of the housing market collapse took its toll, Federal Reserve Bank of New York data show.”

“For most Americans,” the report continues, “whose median household income, adjusted for inflation, is lower than it was at its peak in 1999, borrowing has been the answer to maintaining their standard of living. The increase in debt helps explain why the economy’s main source of fuel is providing less of a boost than in the past. Personal spending growth has averaged 2.4 percent since the recession ended in 2009, less than the 3 percent of the previous expansion and 4.3 percent from 1982-90.”

The Bloomberg report explains that income from wages minus household debt trended downward in 2015, meaning that debt is rising faster than wages, causing a loss of roughly $500 billion across the US economy in the space of just one year.

Poverty rate

Though the Census report shows that the poverty rate declined from 13.5 percent of households in 2015 to 12.7 percent in 2016, this figure is substantially higher than the 11.3 percent level that prevailed in 2000. In reality, individuals and families must make 2.5 to 3 times the official poverty rate of $12,000 for an individual, $15,500 for a married couple and $25,000 for a family of four just to make ends meet.

What the data really shows is that the poorest half of the country–over 150 million people–is in a desperate financial position, with the next poorest 40 percent facing constant financial strain and a declining share of the national income. In regard to poverty, the Census Bureau maintains figures that go up only to 200 percent of the official poverty level. The latest report shows that 95 million people—29.8 percent of the population—fall into this category. The share of those under the age of 18 in this category is much higher–39.1 percent.

This is the context for the drive by the Trump administration and both big business parties to slash corporate taxes, impose a health care “reform” that will increase costs for millions of people, and accelerate the transfer of wealth from the working class to the financial aristocracy.

WSWS

 

 

 

Climate chaos and the capitalist system

Hurricane Irma barreled into Florida over the weekend as a Category 4 hurricane after leaving a trail of destruction on islands and island chains in the Atlantic. Less than two weeks before, Harvey caused a catastrophe in Houston and along the Texas and Louisiana Gulf Coast.

In both cases, it’s obvious how the priorities of capitalism made these natural disasters so much worse. But what can be done about it? Below is a speech, edited for publication, by Paul Fleckenstein given last week–before Irma reached Florida–at a meeting of an International Socialist Organization chapter at the University of Vermont.

Hurricanes Katia (left), Irma (center) and Jose (right) all visible in a satellite image

Hurricanes Katia (left), Irma (center) and Jose (right) all visible in a satellite image

WE ALL witnessed two catastrophic storm events in the past two weeks, and a third, Hurricane Irma, is heading through the Caribbean toward southwestern Florida, where I used to live.

The weather catastrophe that got the least attention in the U.S. was the extreme rainfall in South Asia over the last several weeks as a result of the worst monsoons in decades. One-third of Bangladesh is underwater, and there are over 1,400 reported deaths in Nepal, India and Bangladesh. And this is just the beginning. Millions face a longer-term crisis of hunger and lack of access to drinkable water.

In the U.S., Hurricane Harvey produced record rainfall in Houston (50 inches), caused more than 60 deaths, flooded 100,000 homes and forced 100,000s of people to flee floodwaters.

As Houston resident and SW contributor Folko Mueller wrote, “It will take weeks, if not months, for the city to recover. We can only guess how long it may take individuals to heal from the emotional and psychological distress caused by having lost loved ones or their homes.”

The Houston area is home to 30 percent of the oil refinery capacity in U.S., along with a heavy concentration of chemical plants. There were massive toxic releases from industrial plants into air and water–even by the standards of industry self-reporting, which means systematic underreporting.

Explosions rocked the Arkema plant in the Houston suburbs that produces stock chemicals for manufacturing. It will be many years before we know the full magnitude and effects of this and other releases that took place during the disaster.

– – – – – – – – – – – – – – – –

TO UNDERSTAND and learn from this crisis in Houston, we need to begin with the fact that Houston is a prime example of capitalism in the 21st century.

It’s a city, like others, built around extreme wealth disparities–with immigrants, people of color and the working class as a whole often relegated to the most environmentally dangerous areas. It has its own cancer alley along the Houston Ship Channel, which was, of course, swamped by Harvey.

The area is home to oil refineries owned by all the giant energy firms, from ExxonMobil, Shell and Marathon on down. Houston was the global capital of the oil industry in the 20th century and is still that, which means its elite had an outsized responsibility for global warming.

A city without zoning, Houston has been left to real-estate capital as a super-profit center. Because of the unrestricted development, wetlands and prairie that provide natural storm buffers were paved over with impermeable surfaces. Quick profits were made from building in low-lying areas.

A similar dynamic took place in South Asia with “land reclamations”–filling in wetlands to build mega-cities. As SW contributor Navine Murshid pointed out, the word itself “speaks to the entitlement that capitalist developers feel with respect to the earth.”

Houston had an estimated 600,000 undocumented workers running key sectors of the city’s economy before Harvey, and immigrant labor will be critical to rebuilding. Yet Texas’ anti-immigrant law SB 4, which deputizes state, county, city and campus law enforcement officers as immigration agents, was supposed kick in during the middle of the disaster, scaring many immigrants away from seeking aid.

The city has been devastated by hurricanes before. A ProPublica article published last year found that it was a matter of time before disaster struck–meanwhile, 80 percent of homes flooded by Harvey don’t have flood insurance.

Even for capitalists, there is a carelessness about the making of Houston that is remarkable. One-third of U.S. oil-refining capacity was shut down during the Harvey crisis, and half of all capacity is located in this region that is vulnerable to storms. These are the plants and facilities that send fracked natural gas and refined oil products around the U.S. and the world.

– – – – – – – – – – – – – – – –

THE PHYSICS of severe weather today is pretty simple. A warmer atmosphere holds more water and more energy, providing the fuel for bigger and more intense storms. More severe storms are a certainty as a result of man-made climate change.

And the trend of superstorms, extreme heat events and droughts–of extreme weather events in general–is going in the wrong direction, toward greater instability and extremes. Harvey, therefore, gives us a sobering glimpse of the future.

Naomi Klein, the left-wing author, is right that now is the time to talk about climate change–and after Harvey and Houston, it is necessarily a time to talk about capitalism.

I want to sketch out a basic Marxist understanding of the capitalist roots of the climate crisis. For everyone dedicated to fighting against climate change, Marxism is a great starting point, beginning with the contributions of Karl Marx and Frederick Engels in the 19th century.

As Marx observed in the mid-19th century: “Man lives on nature–means that nature is his body, with which he must remain in continuous interchange if he is not to die. That man’s physical and spiritual life is linked to nature means simply that nature is linked to itself, for man is a part of nature.”

Marx and Engels noted that this unity with nature is ripped apart by capitalism through a “metabolic rift”–a separation that deepened and further developed under capitalism, where a small minority of the population controls all major aspects of the economy.

Capitalists are driven by competition to single-mindedly seek more profits. The free market imposes the drive to accumulate on individual capitalists, which results in a focus on short-term gains that ignores long-term effects of production. As Engels wrote:

As long as the individual manufacturer or merchant sells a manufactured or purchased commodity with the usual coveted profit, he is satisfied and does not concern himself with what afterwards becomes of the commodity and its purchasers…

The same thing applies to the natural effects of the same actions. What cared the Spanish planters in Cuba, who burned down forests on the slopes of the mountains and obtained from the ashes sufficient fertilizer for one generation of very highly profitable coffee trees–what cared they that the heavy tropical rainfall afterwards washed away the unprotected upper stratum of the soil, leaving behind only bare rock!”

At the heart of capitalism is wage labor. Workers are compelled by the need for work to survive to carry out the labor that drives the system–including its most destructive operations, like the drilling platforms or the chemical factories.

In fact, the workers who do this particular work often best recognize the ecological consequences involved–and, unfortunately, experience many of the most dangerous ones. It makes perfect sense that the Oil, Chemical and Atomic Workers International Union spawned a radical labor leader like the late Tony Mazzocchi.

For Marx, the alternative to capitalism’s destructive system was a democratically planned economy: socialism–by which he meant “the associated producers rationally regulating their interchange with Nature, bringing it under their common control, instead of being ruled by it as by the blind forces of Nature; and achieving this with the least expenditure of energy and under conditions most favorable to, and worthy of, their human nature.”

Capitalism is driven by the perpetual need to produce more profit, or it snowballs into recession and crisis. So it isn’t enough for scientists to develop new technologies that could create a sustainable world. They have to be put to use, and under capitalism, they won’t be unless it is profitable to do so.

– – – – – – – – – – – – – – – –

IF WE need a radical reorganization of society, then environmentalists must set their sights not just on changes within the capitalist system, but ultimately on the abolition of capitalism itself. To avoid ecological catastrophe, we need a society based not on competition and undirected growth, but on cooperation, economic democracy and long-term sustainability.

Marx offers a compelling vision of such a society in the final pages of his three volume work Capital: “Even an entire society, a nation or all simultaneously existing societies taken together are not owners of the earth, they are simply its possessors, its beneficiaries, and have to bequeath it in an improved state to succeeding generations.”

Is it possible to reform the current system to achieve this goal? Why can’t oil and chemical corporations at least be regulated so they are not toxic polluters? They should be regulated–but environmentalist and author Fred Magdoff explained why we can’t count on this under the existing system in an interview with SW:

The companies fight against regulations, and if they see that they’re going to pass, they try to get them watered down. And then, if they actually go into effect, the companies try to make sure they aren’t very well enforced. So even if the regulations exist and are meaningful–which is rare–the industry finds ways to get around them.

Often, the fines for violations aren’t very much. You could have a good regulation, and a company violates the regulation, and they pay a thousand-dollar fine or a ten-thousand-dollar fine. For them, what’s the difference?

This is part of why reforms can’t be counted on to save the planet: At the end of the day, capitalist corporations and the pro-business parties running the government will prioritize profits over anything that would reduce them, even by a small amount.

This isn’t only true about the U.S. government under Trump. Barack Obama came into office in 2009 promising radical steps to address climate change. Instead, under his presidency, the U.S. ramped up fossil fuel extraction and processing to deliver cheap energy to U.S. manufacturing so it could better compete globally–and to turn the U.S. into a net oil and gas exporter.

Obama helped undermined the Copenhagen climate change summit less than a year into office, ran cover for BP after the company’s Deepwater Horizon disaster in the Gulf of Mexico and bragged to oil company executives about laying enough pipelines to ring the planet.

– – – – – – – – – – – – – – – –

FOR SOCIALISTS, there are at least two sides of this fight that we have to take up.

One is the struggle for justice in the aftermath of “natural” disasters. The establishment will take advantage of every crisis to further its agenda of privatization, accumulation and gentrification, furthering the oppression of people of color and the working class.

Naomi Klein called this the “Shock Doctrine,” and it played out in New Orleans after Hurricane Katrina in 2005, with mass permanent displacement of African American workers–many of whom ended up in Houston–privatization of the schools and the abolition of the teachers union, although unions are reorganizing today.

We want rebuilding to guard against future floods and disasters–and to take place on the basis of racial justice and equal rights for all, including for all immigrants, regardless of legal status.

Second, we have to fight against fossil fuel extraction and for renewable energy alternatives–which means both protesting pipeline construction and joining with struggles that improve and expand public transportation.

But as we struggle for these short-term measures now, we have to raise the question of capitalism and need for socialism at the same time with everyone we organize with. Our project is for reform and revolution.

If we are organizing with institutions and people where raising the need for a socialist alternative can’t be done, then we are probably organizing in the wrong place–and likely an ineffective place as well.

Meetings and campaigns involving Democratic Party politicians are a prime example. Another is the behind-the-scenes strategies to persuade university committees that claim to be considering fossil-fuel divestment. Their loyalty, at the end of the day, is to business interests–unless they feel the pressure of a struggle that will expose them.

There is certainly no simple answer here. But a socialist strategy that prioritizes mass, democratic organizing; free and open discussion and debate on the way forward; and dedicated struggle for immediate gains, without sacrificing a commitment to the bigger goals, has the most promise.

And if we can build up the politics of socialism and socialist organization among wider layers of people involved in these struggles, that will open the possibility of the system change that we need to find our way out of climate disasters.

There is widespread understanding of the urgency for action now to stop climate change. We don’t have endless generations. CO2 levels will continue to climb despite the scientific consensus that this will have catastrophic consequences for the planet.

But the technology does exist to radically reduce greenhouse gas emissions, as does the science that can be put to use in mitigating the impacts of past carbon emissions–if the system’s priorities were radically changed.

Anyone who thinks we need system change needs to be dedicated to all the struggles for change today–and to arm themselves with the contributions of Marxism toward understanding the roots of the crisis and the alternative to it.

Our struggle for socialism is literally a struggle for the future of the planet.

https://socialistworker.org/2017/09/11/climate-chaos-and-the-capitalist-system

Why was American capitalism unable to prepare for Hurricane Irma?

11 September 2017

After devastating islands in the Caribbean, Irma made landfall Sunday in the United States as a Category 4 hurricane, pummeling the Florida Keys with 130 mph winds and inundating the low-lying islands with up to 10 feet of storm surge.

The 400-mile-wide storm has engulfed the entire state as it makes its way up Florida’s western coast, slamming into the Tampa area as a Category 2 hurricane around midnight. Miami, in the southeast, saw unprecedented flooding as the storm brought major storm surges to both sides of the peninsula.

As of this writing, at least 26 people have been killed by the storm, with four fatalities already recorded in Florida. The total is expected to rise as the scope of the damage left in Irma’s wake is surveyed. Initial estimates indicate that Irma could leave behind $200 billion in damage, greater than that done by Harvey.

Hurricane Irma is a mass event. The storm will eventually impact the lives of tens of millions, including the friends and family of those directly impacted. More than 6.5 million people are under evacuation orders in Florida and another 570,000 in Georgia. Approximately 116,000 people are waiting out the storm in emergency shelters. Thousands of hotel rooms have been booked up in inland Florida and for hundreds of miles north of evacuation zones.

Such major calamities expose the basic structures of social and political life in a particularly stark form. Both Irma and Harvey before it have revealed a country riven by social inequality, plagued by decaying infrastructure and presided over by a ruling elite that acts with criminal indifference when confronted with the basic needs of society.

Even as workers in Houston and the surrounding area confront the task of rebuilding with the most minimal assistance and no insurance, many of those facing Irma’s rain and winds have not been able to leave. While issuing evacuation orders, government officials offered little or nothing in the form of aid. How many people have stayed behind because they were unable to afford the cost of gasoline or plane tickets, or could not get a seat on the severely limited number of buses and trains?

For those with automobiles, their exodus from the storm has been hampered by an absence of a plan for evacuation, with no effort made to efficiently mobilize crucial resources, including gasoline, or arrange places for people to stay. Many have been forced to seek out shelter wherever they eventually ran out of gas along the two highways north.

The abysmal state of infrastructure and rapid urban development have raised concerns about the potential for historic flooding and the integrity of public water systems. At least two million are currently without power, a byproduct of the fact that the US still uses overland power lines. Hundreds of thousands are expected to be without power for weeks.

There is a shift in the consciousness of broad sections of the population, which extends beyond the immediate issues at stake. Significantly, a WSWS article published on Saturday, “Why aren’t trains evacuating people from the path of Hurricane Irma?,” has been shared tens of thousands of times on social media. It has been circulated widely because it asks a basic question that is not addressed anywhere in the media or political establishment.

Why shouldn’t the resources of society be mobilized in a rational and organized way to meet a threat like Irma? To the use of train transport could be added the mass organization of bus and ferry transport, not to speak of the requisitioning of hotels and other accommodations to provide housing for those in need. It is not a question of a lack of resources, or to the extent that these resources are lacking, it is because they have been diverted to other aims.

For decades, the ruling elite has pursued a policy of social counterrevolution, looting public funds and clawing back all the gains made by working class over the last 100 years. Money that could have been allocated to develop infrastructure to counteract the impact of increasingly powerful and predictable storms has been funneled into the pockets of the rich at the expense of the working class and poor.

The American ruling class is incapable of planning anything, except the transfer of wealth and the buildup of a military that has been used to destroy one country after the next.

The response of the political establishment to Irma and Harvey has been to use them as a means of escalating the transfer of wealth. President Donald Trump used his weekly address on Saturday to connect storm recovery to the push to slash corporate taxes. The Democrats, meanwhile, have moved to form an alliance with Trump, the least popular president in history, to bolster an administration that has stumbled from crisis to crisis.

Whatever their differences, the political establishment is united on basic strategic issues. The ruling class is terrified of political instability sparking an economic crisis. Above all they fear of the emergence of an independent working-class movement and will do everything they can to prevent this.

However, a mood of deep anger and opposition has been developing for some time. It needs to be given political form. As the impact of these hurricanes has demonstrated, socialism emerges not as a utopian scheme, but the only way to meet the concrete needs of the working class, and of social development as a whole.

Certain basic actions must be taken. Those who have been impacted by Harvey and now Irma must be made whole through a massive social effort to rebuild quality and safe housing. Everyone has a right to a secure home, not open to the elements like those currently suffering in Florida in mobile structures.

A multi-trillion-dollar public works program is necessary to modernize and develop social infrastructure, including water systems, power grids, bridges, roads and transportation networks. High-quality public transportation is needed not only for the every-day requirements of modern life, but is critical in emergency situations. Plans must be developed in all disaster-prone areas to provide free transportation and emergency housing to all who need it.

Immediate measures, moreover, must be taken on a global scale to halt and reverse the impact of global warming, which contributes to the size and intensity of hurricanes. This requires a coordinated, international program to develop alternative sources of energy.

Such basic tasks, however, are incompatible with a social system, capitalism, in which a tiny layer of financial speculators and corporate executives control the political system and dictate policy. To break the stranglehold of this aristocracy, and to free up resources for critical social needs, the major banks and corporations must be placed under public ownership and democratic control, in the United States and internationally. The wealth of the ruling elite must be requisitioned by those who create all the wealth of society, the working class.

Niles Niemuth

http://www.wsws.org/en/articles/2017/09/11/pers-s11.html

Sanders promised a “revolution,” but campaigned as a democratic reformer. Ultimately that may not be enough

Bernie Sanders’ revolution is still alive — but is democratic socialism a realistic goal?

Since Bernie Sanders’ historic presidential run ended last year, the senator from Vermont has attempted to keep his “political revolution” alive in order to bring about lasting change. Though he lost his Democratic primary run against Hillary Clinton more than a year ago, today Sanders is the undisputed face of progressive politics in America, and consistently ranks as the most popular politician in the country. He is in a very good position, then, to promote his cause and continue his political revolution.

Yet even as Sanders has become a household name in America, some uncertainty has lingered about his political revolution and what it truly represents. Is, for example, Sanders a democratic socialist — as he calls himself — or is he more of a social democrat? And just how radical — and revolutionary — is his political revolution? The word revolution does, after all, historically denote the abrupt and often violent overthrow of a government and/or social system.

In one interview with Rolling Stone last year, Sanders was explicitly asked by Tim Dickinson whether he supported an “overthrow of the capitalist system” like one of his political heroes, five-time Socialist Party presidential candidate Eugene Debs. The senator’s response was unequivocal. “No, no, no. Now you’re being provocative,” said Sanders, who went on to lay out what he actually meant by political revolution:

What we have got to do is not only overturn Citizens United, but we have got to move, in my view, to public funding of elections. We have to pass universal legislation that makes everybody in this country who is 18 or older eligible to vote, so we do away with the Republican voter suppression around the country.

This, of course, is what one would call a reformist agenda rather than a revolutionary one — which is essentially what the Sanders campaign was all about. Though Sanders identified as a “democratic socialist” and advocated a “political revolution,” in reality the Vermont senator was more of a social democrat who espoused a bold though decidedly moderate agenda. Sanders did not advocate an overthrow of the government or the collective ownership of the means of production, but a nonviolent popular movement fighting for progressive reforms akin to the New Deal legislation of the 1930s.

And this is ultimately what Sanders meant by a political revolution. Using the Democratic primaries as a launch pad, the senator aimed to create a sustained grassroots movement similar to transformative social movements of the past (e.g., the Civil Rights movement, women’s suffrage, the labor and socialist movements, etc.). “Change never takes place from the top down, it comes from the bottom up,” the senator frequently repeated during his run, suggesting that electoral politics is limited in what it can accomplish.

Whether one believes in reform or revolution (or, indeed, counterrevolution), it is hard to argue with this theory of change. History shows us that social movements drive progress and that political apathy is the lifeblood of the ruling class. This may sound like common sense, but Americans have become so accustomed to the spectator sport that is modern electoral politics that it was actually radical for Sanders to drive this point home last year. And he has continued to do so over the past year. Indeed, last week he made a stop in Naperville, Illinois to give a presentation on his new book, “Bernie Sanders’ Guide to Political Revolution,” and the message was familiar.

“The struggle of American democracy has been to become a more encompassing democracy, to involve more and more people,” said Sanders to group of high school students. ”And none of that happened by accident. It happened because people stood up and struggled and fought to make that happen.”

Not surprisingly, the senator’s new “guide” to political revolution advocates reforming the system rather than overthrowing it. This is to be expected from a social democrat like Sanders, who believes that it is both possible and preferable to reform our political system and economy through legislative means. But not all of Sanders’ supporters are on the same page. There is a growing subset of progressives who believe that while social democratic reform is a step in the right direction, the end goal should be true democratic socialism — meaning an economic democracy in which workers rather than plutocrats hold power.

This debate between social democrats and democratic socialists was recently on display in the pages of the New Republic and Jacobin Magazine. In the former publication, veteran progressive journalist John Judis wrote an  excellent article on the resurgence of the American left and why he believes it should embrace a social democratic agenda going forward.

The “old nostrums about ownership and control of the means of production simply don’t resonate in 2017,” writes Judis, who contends that social democracy, “while lacking in utopian appeal, does provide a vision that goes very far beyond the status quo in the United States.” The author of “The Populist Explosion” goes on to suggest that American socialists should “do what the Europeans did after World War II and bid goodbye to the Marxist vision of democratic control and ownership of the means of production.”

“They need to recognize that what is necessary now — and also conceivable — is not to abolish capitalism, but to create socialism within it,” Judis concludes.

Responding to Judis’ piece in Jacobin, founding editor Bhaskar Sunkara and Joseph Schwartz, national vice chair of the Democratic Socialists of America, observe that while Judis has good intentions, his reformist vision would ultimately lead progressives “into the dead end of twentieth-century social democracy.”

“History shows us that achieving a stable welfare state while leaving capital’s power over the economy largely intact is itself far from viable,” they write. “Even if we wanted to stop at socialism within capitalism, it’s not clear that we could.”

This is a crucial point that social democrats like Judis must grapple with. Even the French economist Thomas Piketty — an avowed European social democrat — concludes in his bestselling book on inequality, “Capital In the Twenty-First Century,” that the “golden age” of capitalism in the mid-20th century, when inequality levels actually declined, was a historical aberration that is unlikely to repeat itself. While social democrats are often seen as the pragmatists of the left, it is the democratic socialists who recognize the structural forces of capitalism and the inevitable antagonism between labor and capital.

Of course, the question of political pragmatism depends largely on one’s perspective. In the short term, the social democrats who are currently trying to take over the Democratic Party and carry out a progressive agenda in the halls of Congress are certainly more pragmatic than the democratic socialists who obstinately reject the Democrats. The United States has a winner-takes-all voting system that favors two major parties. Until we see electoral reforms that not only eliminate money from politics but create proportional representation  and ranked-choice voting, working with (and within) the Democratic Party seems to be a necessity. This does not mean the left should limit itself to electoral politics, however; as Sanders has argued over the past two years, there must also be a sustained popular movement that pressures elected officials to pass the needed reforms.

This may be the pragmatic way forward in the short term, but in the long run the left must also deal with the question of what comes after the current stage of capitalism and how to create this future. Social democracy cannot be the end goal, lest we repeat what happened at the end of the 20th century. At the present moment it is imperative to work within the system and fight for meaningful reforms. But eventually a true “political revolution” may be necessary to confront capital in the 21st century.

 Conor Lynch is a writer and journalist living in New York City. His work has appeared on Salon, AlterNet, Counterpunch and openDemocracy. Follow him on Twitter: @dilgentbureauct.

Hurricanes Irma and Harvey: Natural disaster and political breakdown

9 September 2017

The catastrophic impact of Hurricane Harvey in southeast Texas and the unfolding disaster of Hurricane Irma in south Florida are ruthlessly objective tests of the ability of America’s ruling elite to manage the affairs of society. By any reasonable standard, the capitalist class has failed, and failed miserably.

Two weeks after the Texas Gulf Coast was devastated by Harvey, millions of people are seeking to rebuild their lives with minimal social assistance. Hundreds of thousands of homes were damaged or destroyed, one million cars rendered inoperable, countless schools and other public facilities flooded and likely ruined beyond repair. At least twenty-two people are missing, most now presumed dead, on top of the more than 70 deaths officially acknowledged.

To address the costliest natural disaster in American history—at least until the toll of Hurricane Irma is tallied—with damage estimates approaching $200 billion, the Trump administration and Congress have approved a derisory $15 billion in federal assistance, ratified by the House of Representatives Friday.

The bulk of this money goes to the Federal Emergency Management Agency, which doles out funds limited to $30,000 per family, through a nearly impenetrable bureaucratic process in which the victims of the storm will be treated like criminals or con-men. Other funding is routed through the Small Business Administration, in the form of loans that those driven from their homes by the hurricane will be hard-pressed to repay.

Hurricane Irma is even more powerful than Harvey. The storm has already laid waste to several of the Lesser Antilles and to the Turks and Caicos Islands, as well as battering Puerto Rico, the Dominican Republic, Haiti and Cuba. Irma began passing the Bahamas on Friday and is scheduled to make landfall somewhere in south Florida on Sunday afternoon.

Hurricane Irma is the most powerful storm ever recorded on this planet, with the most “accumulated cyclone energy,” one measure of overall intensity. It has sustained maximum wind speeds of at least 180 miles per hour for 37 hours, longer than any previous storm. Its size is vast: twice the extent of Hurricane Andrew, which devastated south Florida in 1992. The storm is so large that it is wider than the Florida peninsula itself, raising the possibility of simultaneous storm surges on both the Gulf Coast and the Atlantic Coast, an unheard-of phenomenon.

A lethal threat faces one of the most densely populated areas in the United States. But the response of local, state and federal officials has been to tell the potential victims of Irma: “You’re on your own.” This was the theme of several press conferences and briefings on Friday, as government officials told some six million people in south Florida to leave the region if possible, or else go to hurricane shelters.

These shelters are entirely inadequate—some sizeable cities, like Ft. Myers on the Gulf coast, have none. They are unavailable to many poor and working-class residents. The Coalition for Racial Justice complained that Miami-Dade’s shelters are open only in wealthy areas, a more than 30-minute drive from the city’s poorer neighborhoods.

Mandatory evacuations have been ordered for the Florida Keys, for Miami Beach and much of Miami-Dade, the state’s largest metropolitan area, as well as portions of Broward and Palm Beach counties and much of the southwestern corner of the state as well. Combined, they are the largest mandatory evacuation in US history, leaving all highways north completely jammed with traffic. Most gas stations have run out of supplies, leaving many residents stranded in their cars as the hurricane approaches.

The most basic measures to ensure that people can leave have not been taken, such as a mass coordination of free rail, bus and airplane transportation. Many of those leaving have no idea where they will stay, as hundreds of thousands attempt to find accommodations on the route north. Many are stuck at the airport, with no open flights and all shelters filled.

The Trump administration “prepared” for the one-two punch of Harvey and Irma by proposing to slash spending on FEMA and other relief and disaster management agencies, to say nothing of its war against climate science, waged on behalf of the oil, gas and coal producers and other big industrial polluters.

Even the succession of hurricanes—with Jose and Katia lined up to follow Harvey and Irma, four giant storms in only three weeks, fueled by ocean waters now at an unprecedented temperature of 90 degrees Fahrenheit—has not produced any rethinking by the know-nothings of the Trump administration. The unending stream of disasters proves the reality of climate change—to which one must add the fires raging on the US West Coast and the floods that have devastated South Asia—demonstrating the inability of the ruling classes of all countries to take any serious measures to address the growing threat.

EPA administrator Scott Pruitt, a notorious global warming denier, denounced any discussion of climate change as “very, very insensitive” to the people of Florida. “To have any kind of focus on the cause and effect of the storm, versus helping people, or actually facing the effect of the storm, is misplaced,” he argued.

By the same logic, any discussion of plate tectonics or seismic faults should be banned during an earthquake, nor should there be any analysis of El Nino wind effects during wildfire season. Nuclear physics would be off-limits during a reactor meltdown. And, we might add, there could be no discussion of the economic laws of capitalism during a meltdown of the financial markets.

There is a distinct class content to this rejection of science, or, indeed, any serious thought. The US ruling elite, at every level, refused to plan seriously for natural disasters which were both predictable and inevitable. Once the disasters unfolded, the representatives of big business could barely conceal their indifference and annoyance at the plight of what one of Trump’s real estate colleagues, Leona Helmsley, sneered at as “the little people.”

Natural disasters have a way of exposing social and political reality. The Great Lisbon Earthquake of 1755, which destroyed much of the Portuguese city, was a significant event in the development of Enlightenment thought in Europe, in the decades that preceded the French Revolution. It was proof, Voltaire noted in his Candide, of the absurdity of the claim of the philosopher Leibniz that “all is for the best in the best of all possible worlds.”

Who could follow Leibniz in making such an argument today? American and world capitalism is rotten to the core. The ruling class presides over unprecedented social inequality and unending war, in which resources are dedicated to greed and plunder, but the most basic requirements of modern society go unmet and ignored.

Patrick Martin

http://www.wsws.org/en/articles/2017/09/09/pers-s09.html

Enough With the Top 1 Percent: The Top 20 Percent, the Upper Middle Class, Is Hoarding the American Dream

ECONOMY

Scholar Richard Reeves points out the real winners in the economy as Congress eyes tax reform.

Photo Credit: University of Nevada Las Vegas / Youtube.com

Already President Trump and the Democrats are trading clichés in the opening skirmishes over Trump’s tax reform proposals. Yet both are missing the bigger reality of who are the economy’s winners and losers—a pattern that’s only grown over recent decades.

Trump, of course, want to cut corporate taxes, and consolidate and lower rates for income tax brackets, among other things. All one really needs to know there is that he is dubiously assuming the savings for businesses wil “trickle down” to employees in jobs and wages. Leading Democrats, in response, are being misleading in a different way.

“If the president wants to use populism to sell his tax plan, he ought to consider actually putting his money where his mouth is and putting forward a plan that puts the middle class, not the top 1 percent, first,” Senate Minority Leader Chuck Schumer said.

Trump’s plan mostly would benefit the biggest corporations and the wealthiest individuals. But Schumer’s Occupy-Wall-Street-like whack at the top 1 percent and defense of the so-called middle class is muddled in a different way. That’s because it isn’t the super rich, but the upper middle class—representing the top 20 percent, or households making at least $117,000 a year—that disproportionately have been doing better than the rest of Americans, the bottom 80 percent. Their tax breaks are one reason why.

“The upper middle class, the top fifth, broadly, and above, not only maintain their position very nicely, but perpetuate it over generations more effectively than in the United Kingdom,” said Richard Reeves, a Brookings Institution scholar and author of Dream Hoarders: How The American Upper Middle Class is Leaving Everyone in the Dust, Why That is a Problem, and What to Do About It. “And yet, that that’s not so widely known or seen as a problem, because of the kind of myth of classlessness that has developed in the U.S.”

Comments like Schumer’s—defending a blurrily defined middle class—are a perfect example of the myth of classlessness that is parsed by Reeves, who was born in Britain but became a U.S. citizen. The biggest picture statistic he cites to frame the problem of improperly dissecting the economy’s real winners and losers is pre-tax income growth between 1979 and 2013. The bottom 80 percent saw their incomes grow by $3 trillion, while the top 20 percent saw their incomes grow by $4 trillion. When you put this on a graph, the bottom four quintiles, or 20 percent sections, slope upward slightly. But not so with the upper middle class; people making roughly $120,000 a year or more.

Why does this matter? It doesn’t just confirm what most Americans feel—that they are relatively stuck economically, perhaps doing better than their parents, but sometimes not even that. It shows that bashing the super-rich, the 1 percent, is politically expedient rhetoric that diverts the focus from those in America, members of both major parties, whose interests are maintained by the political system, instead of sharing the wealth. Reeves’ book, Dream Hoarders, explains how the top 20 percent protects its status, essentially by segregating educational opportunity, their housing—which is federally subsidized through the tax deduction for home mortgage interest rates—career networking and other government-supported perks. As he recounts in a lecture that traces how he wrote his book, he started by noticing the politics surrounding a 2015 proposal by President Obama to change the way the feds managed tax-free college savings plans, called the 529 program.

“Don’t you dare touch my 529!” was the response upper-middle-class constituents told top Democrats, Reeves said, then laying out how these folks think: “Do you know how hard it is to make ends meet by the time I’ve saved for my kids’ college, paid their private school fees, paid my massive mortgage—thanks for the [mortgage deduction] tax break; still it’s lots of money—I’ve got a skiing holiday, school trip gets more expensive, I’m barely making even here…I’m working really hard. I’m part of the 99 percent.”

“No, you’re not,” Reeves said, underscoring how the upper middle class is different. The 529 tax break was a college savings plan where you don’t pay any capital gains on money set aside and invested here, he explained. Who has these college savings plans? he asked. Forty-seven percent of people earning $150,000 or more annually, he answered.

“The truth was it [Obama’s proposal) was unbelievably unpopular among the constituency that really mattered… something that was virtually sacred for the upper middle class in America. It was about education. This was rewarding savings. It was about the future,” Reeves said. “For me, it was like, boom! No wonder we can’t change the tax system, when even relatively liberal people try to do it… People also forget this [529] was a tax break that has long been proposed by Republicans… Don’t mess with the American upper middle-class—that was the lesson.”

Reeves listed a series of metrics that he says amount to hoarding the American dream. It’s the inverse of the way social scientists talk about intergenerational poverty, or cite statistics about how most people don’t stray far from the rungs on the economic ladder of the family they were born into.

Thirty-seven percent of those born into the top 20 percent also stay there, he said, a slightly bigger number than the poorest 20 percent of Americans. “Wealth is even stickier than income. Forty-four percent of the wealth of the upper 20 percent remains there.”

Why is this happening? It comes down to hoarding the best opportunities in education, housing, careers and government tax policies that reinforce that status. This is not about inheritance taxes, which is a rarified subject. It’s how 40 percent of the upper middle class live near the public schools that have the best test scores. It’s how zoning in those communities only allows housing at price points well above those affordable by people earning median incomes—the real middle class. It’s about how the mortgage deduction allows people to buy even pricier homes. It’s about going to top schools, colleges and universities, and sending your kids there, and creating networks that turn into select entry-level jobs, internships and careers. In short, Reeves says all the political verbiage about equal opportunity, meritocracy and fighting inequality is sullied.

“Forty-six percent of those in the top 20 percent have the same educational status as their parents. The inheritance of educational status is even greater than wealth, which is even greater than income,” he said. “The expansion of higher education in the U.S. has disproportionately gone to the top. Four out of five of those in the top 20 percent go to elite schools. Two-thirds of the students in the top schools are from the top 20 percent.”

On the subject of tax breaks—which will be coming to the national political landscape as Trump and the GOP push tax reform—the upper 20 percent gets the most capital gains benefits, mortgage interest deductions and Social Security and pension earnings, Reeves said.

“The point is clear. This is upside-down. These are upper-middle-class tax breaks,” he said. “And, like the 529, guided with laser precision to the bank balances of people like me: to the bank balances of people who have been doing so well in recent years. And by god, it’s hard to touch them. Even the incoming Treasury Secretary [Steve Mnuchin], he mentioned we might reduce tax rates but do so by getting rid of a lot of these deductions. Wow, that didn’t last very long. By the time the National Association of Housing and the Republicans [weighed in]… This stuff is hard to get at. I think part of the reason is we [the upper middle class] have kidded ourselves that we are part of the 99 percent.”

Reeves said that nine out of 10 Americans tell pollsters they are middle-class. That isn’t accurate or useful on many levels, he said, especially when it comes to addressing the lingering frustrations about one’s place and prospects in the American economy.

“I have genuinely come to believe that unless the conscience of the American upper middle class is somewhat awakened, then it will be very hard to bring about the political reforms that I believe are necessary… to one of equal opportunity,” he said. “Right now, America, some of America, has something of a problem of a sense of entitlement. And I mean the upper middle class. And they are very good about sometimes talking about people who feel entitled to welfare; I think they feel pretty entitled to their upper-middle-class welfare too. I think Obama found that out too.”

Indeed, Reeves said it is not very useful for Democrats to keep pushing out the rhetoric blasting the 1 percent, because among other things, that’s not what’s really going on, and it doesn’t address structural inequality.

“I think that until and unless we recognize that we are not the 99 percent, that we have done pretty well, and that we will have to give something up—not much, but a bit, a bit on zoning, a bit on school admissions, a bit on taxes, in order to help the others—then we won’t get anywhere,” he said. “But that will require us to recognize that we are not the losers from inequality trends, but the winners.”

Steven Rosenfeld covers national political issues for AlterNet, including America’s democracy and voting rights. He is the author of several books on elections and the co-author of Who Controls Our Schools: How Billionaire-Sponsored Privatization Is Destroying Democracy and the Charter School Industry (AlterNet eBook, 2016).

http://www.alternet.org/economy/enough-top-1-percent-its-top-20-percent-upper-middle-class-thats-hoarding-american-dream?akid=16043.265072.7R3xaE&rd=1&src=newsletter1081981&t=4