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How Much Further Does America Have to Fall down before You Stand up? The Death of the American Dream


(Written by an American expat living in the European Union)

Why are there 59 million Americans who don’t have health insurance; 132 million who don’t have dental insurance; 60 million who don’t have any paid sick leave; 40 million who are on food stamps?

This diary attempts to look at why the American social safety net is so weak and the European social safety net is so strong. In a posture where everyone in the European Union has some type of medical and dental plan, paid sick leave, and no one in Europe is ever humiliated by the use of food stamps. As a business librarian with graduate degrees in both of those areas I am periodically asked to write reviews. This review will look at European media sources unavailable in the US which declares an end to American exceptionalism and therein the death of the American working class dream.

America’s rich, corporations and individuals have decided that the solution to all future problems in America will be solved by austerity measures, rather than higher taxes on corporations and the wealthy. They have socialized risk and privatized profits! So it is that this diary by way of a European media seeks to chronicle the betrayal of the working class American dream by America’s power brokers and plutocracy from the perspective of European media sources.

Guardian.co.uk – The myth of ‘American exceptionalism’ implodes
One aspect of “American exceptionalism” was always economic. US workers, so the story went, enjoyed a rising level of real wages that afforded their families a rising standard of living. Ever harder work paid off in rising consumption. The rich got richer faster than the middle and poor, but almost no one got poorer. Nearly all citizens felt “middle class”. A profitable US capitalism kept running ahead of labour supply. So, it kept raising wages to attract waves of immigration and to retain employees, across the 19th century until the 1970s.

The Guardian accurately identifies a salient aspect of American exceptionalism as being market economics up to the period of the 1970’s, wherein though the rich accumulated assets faster than everyone else, essentially most people didn’t feel poor as the working class during that era was allowed to fully participate in the wealth that they themselves created by receiving a higher standard of living and consumption made possible through a rise in real wages. The American economy of that era essentially ran ahead of the available labor supply right up to the 1970’s offering ever higher wages therein attracting new waves of immigrants, while concurrently through higher salaries worked to retain valued employees. Then suddenly there was what we in business jargon call a complete paradigm shift. There was a deskilling in the American labor force that had taken place, which is essentially described in Jeremy Rifkin’s – The End of Work, where millions lost their jobs to technology based innovation and computers.

Through the advent of technology, after all automated systems don’t need the lights on. They don’t need the heat on. They don’t strike. They don’t need maternity leave. This was the death nail of rising wages and benefits for the American working class, as there was no longer a labor shortage. So it is that during the last 3 decades the American working class started its decline. For a while people then turned to credit to bridge the gap, but with the market crash of ’08 this now seems to be gone. It is almost as if American plutocrats were channeling Marie Antoinette saying let them eat credit!

It was about this time that the previous inequitable distribution of wealth prior to the 1970’s took a rather precipitous turn, and suddenly the rich by every conceivable measure became much richer. Perhaps if Tocqueville were alive today he would say it was the day they ripped the guts out of American exceptionalism, because on that day the American dream died.

Since the 1970s, most US workers postponed facing up to what capitalism had come to mean for them. They sent more family members to do more hours of paid labour, and they borrowed huge amounts. By exhausting themselves, stressing family life to the breaking point in many households, and by taking on unsustainable levels of debt, the US working class delayed the end of American exceptionalism – until the global crisis hit in 2007. By then, their buying power could no longer grow: rising unemployment kept wages flat, no more hours of work, nor more borrowing, were possible. Reckoning time had arrived. A US capitalism built on expanding mass consumption lost its foundation.

The richest 10-15% – those cashing in on employers’ good fortune from no longer-rising wages – helped bring on the crisis by speculating wildly and unsuccessfully in all sorts of new financial instruments (asset-backed securities, credit default swaps, etc). The richest also contributed to the crisis by using their money to shift US politics to the right, rendering government regulation and oversight inadequate to anticipate or moderate the crisis or even to react properly once it hit.

http://www.guardian.co.uk/commentisfree/cifamerica/2011/jan/17/economics-globalrecession

Indeed, the rich have so far been able to use the crisis to widen still further the gulf separating themselves from the rest, to finally bury American exceptionalism. First, they utilised both parties’ dependence on their financial support to make sure there would be no mass federal hiring programme for the unemployed (as FDR used between 1934 and 1940). The absence of such a programme guaranteed that real wages would not rise and, with job benefits, would likely fall – as they indeed have done. Second, the rich made sure that the prime focus of government response to the crisis would benefit banks, large corporations and the stock markets. These have more or less “recovered”.

Third, the current drive for government budget austerity – especially focused on the 50 states and the thousands of municipalities – forces the mass of people to pick up the costs for the government’s unjustly imbalanced response to the crisis. The trillions spent to save the banks and selected other corporations (AIG, GM, Fannie Mae, Freddie Mac, etc) were mostly borrowed because the government dared not tax the corporations and the richest citizens to raise the needed rescue funds. Indeed, a good part of what the government borrowed came precisely from those funds left in the hands of corporations and the rich, because they had not been taxed to overcome the crisis.

http://www.guardian.co.uk/commentisfree/cifamerica/2011/jan/17/economics-globalrecession

The real death nail of American exceptionalism came when plutocracy through corporate America made it impossible for govt to ensure that they would ever be asked to pay their fair share of taxes again. This meant that tightening budgets would become a mainstay of life for the American working class through federal and state programs, which were designed to help working class people. Therefore when the crisis of ’08 hit, part of the solution was never to do the right thing, in terms of raising the taxes on the rich and on Wall Street, who in fact were the very people responsible for the crisis in the first place. Instead the American taxpayer that is to say, working class people were forced to bailout Wall Street, in a system that had privatized profits and socialized risk.

Massive intervention was taken by American plutocrats to ensure that there would be no government bailout for the American working class through a system like the CCC which was introduced by President Roosevelt, wherein the federal government created jobs for working people on various types of public work’s projects. This not only would have stabilized the American working class, but it also would have stabilized working class wages in America by creating a labor pool, wherein corporate America in order to compete with the public sector would have to pay higher wages, and benefits to American working class families. Therein stabilizing the American dream for generations and taking an important step in initiating a European style social safety net for the American working class.

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It is a well known tried and true tactic of the plutocracy that historically they have been able to turn one half of the working class against the other half of the working class by hiring barkers to infuse paranoia in the public discourse, so that the working class winds up fighting each other. To which this diary asks, is Sarah Palin one such paid mouth piece of the plutocracy and the Tea Party the creation of paranoia?

While we as Americans may not necessarily agree with all of the analysis of a noted political assassination scholar Mr. Schneider as published by the Spiegel magazine on 21st January 2011 entitled ‘Inside the minds of Paranoiacs.’ There is nonetheless a riveting quote with which we as progressives should draw an important nexus; and that is the culture of the Republican Party according to this expert suggests that Sarah Palin can’t logically seem to disabuse herself of. Palin on the one hand appears to be promulgating a far right culture, which has at its heart suspicion of government mind control. While on the other hand she tries
to distance herself from that phenomenon which it is believed by some that it contributed to the tragic Arizona shooting.

SPIEGEL: Sarah Palin and the Tea Party have been accused of being partially responsible for a climate in the United States that can lead to such an incident. But Palin, using arguments similar to yours, rejects the larger society’s paranoiac attempt to find an explanation and says that such acts stand on their own — and are therefore random.

Schneider: Of course, it’s absurd to assign the blame to Palin. But even without drawing paranoiac conclusions, one can immediately recognize a web of relationships into which the assassination fits and to which Loughner, the killer, consciously refers. And the fundamentalist Republic polemic is part of this context. Take, for example, the use of the term “mind control.” This is the central, paranoiac concept of the American right, which assumes that the government controls the thoughts of citizens through language and the media. It’s paradoxical for Palin to demand that we see the killings as an isolated incident, that is, a chance event. In doing so, she is suddenly abandoning the system of paranoia, with its accusations of mind control, that she and the Tea Party were more or less complicit in creating.

http://www.spiegel.de/international/world/0,1518,740665,00.html

This diary doesn’t take a position on whether or not right wing hate radio attempts to exploit vulnerable mentally ill populations. However this diary does note that the right wing agenda in Arizona and across America in keeping with the Tea Party platform wants to roll back progressive health care reforms, therein leaving the 59 million Americans who are believed not to have medical insurance also not able to access mental health services. As such I invite you to give a close read to the quote below in the British Guardian newspaper.

Guardian.co.uk – Jared Lee Loughner and mental health crisis

We cannot know what was in the mind of the Arizona shooter, but we do know too many troubled people go without care
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The bitter irony is that the governor of Arizona, Jan Brewer, who just last week was offering prayers of support to bereaved relatives in Tucson, has this week announced the suspension of Medicaid in Arizona in order to balance the budget. This will cut off healthcare, including mental healthcare, to more than a quarter of a million low-income Arizonans – people whose personal economic circumstances may look much as Jared Lee Loughner’s did. It would be disrespectful to people with mental illness to call this policy mad, it’s just very, very stupid.

http://www.guardian.co.uk/commentisfree/cifamerica/2011/jan/21/jared-lee-loughner-arizona-shooting

About 2 months ago, the British Guardian newspaper published a seldom if ever read statement by American audiences, which is to say they published that much of the American middle class who have now become America’s nouveau poor in fact were working class folks who bridged the gap to a middle class lifestyle based on 30 years of the plutocracy saying let them eat credit and now it’s over. The only question is will it ever come back? In which case we would have to ask how long before that credit bubble bursts again and then what? Are we then set for a third world America as Arianna Huffington tells us in her new book, Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream.

(Guardian.co.uk) America’s new poor: the end of the middle-class dream
America’s middle class is disappearing. A lifestyle sustained for 30 years by rising debt is dissolving as the credit dries up. And the question beyond the crisis is: can it ever come back?
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The kindest thing they could do is tell the truth: Americans have been living a middle-class lifestyle on working-class wages – and bridging the gap with credit. And it’s over.
http://www.guardian.co.uk/commentisfree/cifamerica/2010/oct/12/end-of-the-middle-class-american-dream

(Cross posted by author from the Daily Kos.)

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