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Class Warfare Cuts Both Ways

In the US we are well accustomed to the reality that occurs when someone says something simple and obvious like tax the rich. The pundits spring up like mushrooms after a Spring shower crying that’s class warfare. It’s UN-American! However when the Catfood Commission proposes reducing Social Security and President Obama freezes the wages of all federal workers we are supposed to regard that as fiscal prudence. I call bullshit.

Paul Krugman has an excellent post on his blog demonstrating the class bias in the war on Social Security.

Class And Social Security

Social Security, by contrast, is something that matters enormously to the bottom half of the income distribution, but no so much to people in the 250K-plus club. A 30 percent cut in benefits would represent disaster for tens of millions of Americans, but a barely noticeable inconvenience for VSPs and everyone they know. A rise in the retirement age would be a vast hardship for people who do manual labor, but if anything a gift to VSPs, who don’t want to step aside in any case. And so on down the line.

Using $250K as the bar at which it ceases to matter makes a convincing argument, but it probably isn’t all that critical for people a bit below that mark. I think that it is clear that American households with incomes below $50K are desperately in need of the social safety net in the present economic environment and that any cuts will have a drastic impact. The people at the upper end and at the lower end basically know where they stand. It is people in households with incomes between 50K and 100K who are running like rats in a maze.

Since the end of WWII American mythology has been firmly anchored in the notion of the US as a middle class nation. Being a nation of home owners and car drivers was a concrete manifestation of that. During the McCarthy era militant unionists and trouble makers were targeted as communist subversives. There was enough money in the pot to buy off skilled labor with a better level of income than they had ever known before. Of course that arrangement began to come slowly unraveled in the 70s with the shift of the manufacturing base that supported those skilled jobs to low wage climates. The stagnation and gradual decline in American incomes was masked by bubbles and personal debt accumulation.

The median US household income for 2010 is $50K. That means that half of all households are below that number. About 30% of households have incomes between $50K and $100K. These are the people who are being tugged in two directions. American mythology tells them that if they believe in the principles of free enterprise, free markets, motherhood and apple pie, they too can become wealthy and powerful. However, it has begun to dawn on most of them that those dreams really aren’t coming true.

The question about the future for Americans will be largely determined by who gets the attention of this 30%. The Tea Party has gotten some of them. Clearly a lot of them voted Republican is the recent election out of frustration. It is unclear just how many of these people are feeling immediate pain from the recession. Most of them are likely still employed and probably haven’t been pushed out on the streets. They have seen the value of their houses and 401Ks decline and they are uncomfortable about the future. The Democratic party is under the control of an administration adrift in a sea of confusion. There is no coherent progressive alternative being offered. The Tea Party has managed to enlist a substantial number of people who really need a safety net in the campaign to destroy it.

This would seem to be how you run a class war from above. Maybe that’s why it works so much better than one from below.

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Richard Lyon

Richard Lyon

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