Requiem for the American Dream
I ran into an issue with a potential fundraiser the other day. We were going to show a movie free of charge to raise some funds, but ran into an issue getting permission to do so and had to cancel. As we were looking for a replacement, a friend suggested ‘Requiem for the American Dream’ from Noam Chomsky. While I don’t completely agree with his politics when I watched the movie on Netflix I thought he was on to something. I’d like to share it with the district.
The Missed Message
I recently put up a post on Facebook entitled ‘Can Michigan Workers Afford the Conservative Revolution’. While it was definitely discussed, the thread seemed to center on defenders and attackers of Ronald Reagan. Upon review, I don’t believed I properly developed the premise and readers started putting their own spin on the subject. Watching this movie (I’ve got the summary above, moves a little slow but makes the points) I saw there was a better way to present the information. Let’s take another stab at it and see if it makes sense.
The Basis of the Economy
75 years ago, Michigan and the rest of the nation had an economy based on manufacturing and industry. Corporations were led by visionaries in their fields- people like Thomas Edison, Henry Ford, and Howard Hughes. They developed and manufactured their products. Workers were key to this economy, they took raw materials and fashioned finished goods to create profit. A modern example is Steve Jobs of Apple, a throwback to this bygone era.
The market depended on average consumers (the workers themselves) who earned enough to buy the products they built. Ford actually raised the wages of its workers in the 1950’s so that they could afford to buy the cars they made- labor and consumer buying power were that valuable to corporations. This was the ‘Golden Age’ of America, the 1950’s and 60’s. When Mr. Trump talks about ‘Making America Great Again’, this is the image and memory he is calling upon.
The market model. We input money, a miracle occurs in the Black Box, and more money (profit) comes out the other end.
In a manufacturing based economy, the black box contains the production lines, manned by workers. Money (and raw materials) goes in, the workers transform it into a product, the product is sold and profit made. Workers create value at the expense of wages, compensated injuries, and pensions. Profits are made by selling the goods to a market of consumers that can afford the products. Owners profit, workers profit, taxes are paid, and the economy booms. Free Markets reward the companies that do this well, those that do it poorly fail, and workers are employed by whomever is hiring and earn market wages based on supply and demand of labor with an emphasis on paying them enough to buy goods in the market.
The Economy Changes in the 70’s
This model began to change in the 1970’s. We shifted our economy from one based on manufacturing to one based on finance. Why the switch? Simple economics. By using speculation and accepting risk, simply moving money around created more money. Money went into the black box, it went through many hands with varying degrees of risk, and came out the other end as more money based on the amount of risk and type of transactions it experienced in the box. Whats more a stock certificate does not get carpal tunnel, a corn future doesn’t get a pension, and neither go on strike.
The rich put money in the box, and become richer when they take it out the other end. Workers become a liability, an expense, to eliminate or outsourced. The consumers don’t need money in their pockets to keep the economy going, because they are not a financial institution’s market, other financial institutions are. Corporations become masters of maximizing profit and minimizing expenses. They are not run by visionaries, they are run by accountants focused on the bottom line. Ford is run not by an engineer or even a stylist. It is run by gentleman that has a degree in Economics and a Harvard MBA. He probably never changed his own oil, much less built a car. Prior to taking the helm at Ford, he was an executive at IBM. When he leaves, maybe he’ll run a Hollywood studio and finance movies.
Who Pays the Bills?
In a finance based economy, the rich provide the money, the speculation occurs, and they keep most of the profits that come out the other end due to low corporate (and wealthy income) tax rates. The risk they take in the black box generates the money rather than creating a real object. Who takes that risk? YOU DO, not them. Because if they blow it, rather than take their loss and sulk away as free market capitalism would require, they are ‘too big to fail’ without catastrophic effects on the financial markets. So the taxpayers bail them out.
I always thought it ironic that the banks got billions in bailout money, but my credit card balances still needed to be paid in full to those same banks. My life revolved around meeting my debt obligations, my opportunities depended on my credit rating rather than my ideas, and Ford didn’t care if I bought a new car or not, because as long as ‘some’ of us did they could make the same bottom line by moving production to Mexico and increasing their profit per unit. Their stockholders got dividends, their executives got bonuses, and I’ve not bought a new car since 1988 (and that was with an inheritance from a rich aunt).
A few of you might have had a mortgage burning party. Why is that a celebration? Because you celebrate years of hard work paying off something you value, you set your mind to something and accomplished a goal through hard work. You gained a benefit, you own a home. Or you at least think you do, if you wonder about who owns your home, don’t pay your property taxes for a couple of years and you will find out who really owns it.
Taxes should be much like your mortgage burning. The idea behind taxes is that you and your neighbors get together and figure out something you REALLY think is worth doing, like sending your kids to school or keeping the Japanese from taking over Hawaii. Then you all get together on April 15th and pay for your choice. Let’s fire up the grill, we get to keep speaking English, and know how to do long division to boot.
But we hate paying taxes. Because we don’t feel we all got together to do something worth wild, something worth spending some of our hard earned money on. We don’t feel our elected officials have our best interests at heart. We always have viewed politicians with a healthy suspicion, but now rather than just being crooks and liars, we view them as working for corporations rather than the voters.
Elections are Expensive
Elections are becoming increasingly expensive to win. I’ve been told to have a chance at the House, I’d need to raise close to $60,000 to have a decent chance at a $71,000 a year job. Most folks, including me, can’t afford to write a check for $60,000. So the choice is simple, take money in large amounts from special interests, or be at a ‘disadvantage’. Where does this money come from?
The goal of powerful people and corporations is to make as much money as they legally can. Part of their profits are ‘invested’ backing political candidates, candidates that will later remember ‘who helped them get elected’. The payoff on the investment is that laws are crafted to make more ‘legal’ ways to make money for the investors.
Court rulings from the 70’s to Citizen’s United have repackaged corporations as ‘persons’. Persons with rights. They claim protection under the 14th amendment from being deprived of ‘life, liberty and the pursuit of happiness (profit)’ except under the due process of law. Money has become ‘Protected Speech’, and is used to craft the government and the laws sponsored by the legislators their ‘Speech’ helped get elected.
This is going on in the 97th District. My opponent has taken over $30,000 in out of district special interest money. I’ve raised around $10,000. That puts me at a financial disadvantage. I’ll accept that and try to make it up by having actual positions and working hard to get them before the voters. While I have a number of well considered positions, the main message I want to get to the voters is that my funding is from the 97th, my priorities are with the 97th, and my loyalty is with the 97th. If elected, I’ll actually represent the 97th, not the special interests.
The American Dream
We can be born poor, but with hard work we can become rich. Our children will have better lives than we did if we work to better ourselves.
Dr. Chomsky raises an interesting point. In the Great Depression, we face severe economic hardship. But we survived it due to the American Dream, we knew things would get better if we just worked through it. This gave use the confidence to invest in our own future with the New Deal. We built great things, we took care of those in need. We even took tax money and sent artists to decorate schools and post offices to keep culture alive.
There are some things that are stable through the change from a manufacturing to finance based economy. The service professions. People will get sick, so doctors and nurses will have jobs. They need haircuts. Furnaces and cars need to be repaired. Due to the severe financial stress most families face, they will continue to get divorced and need lawyers.
AmWay is another variation worth mentioning, as it’s money is coming into to play in the 97th. Richard DeVos did not develop laundry detergent or the other products AmWay sells. Those are obtained from other sources. He developed a brilliant marketing strategy based on just enough of the American Dream to get people to buy into it. There are not many AmWay distributors, no matter how many other distributors they recruit under them, that are millionaires. But the DeVos Family became billionaires by providing the products all of them sold.
They are the major investors in Michigan Conservative Politics and are using those investments to shape the Future of Michigan. The Mackinaw Center, Right to Work, Freedom to Work (RTW without the dues or protection- promoted as ‘freedom’ but simply a way to defund the unions and reduce their influence). Their Charter Schools divert funds from public schools, and they are paid extra to comply with state regulations. The Detroit Public Schools were defunded in this way, requiring emergency managers and a public tax bailout.
Dr. Chomsky sets out his ’10 Principles of Concentration of Wealth and Power’ in Requiem to the American Dream. Several have already been listed. Let’s consider some of the others.
- Democracy is opposed by the rich, periods of increasing democracy (the 1960’s) are followed by a backlash from the 1% (the 70’s and the ‘conservative revolution’).
- Shifting the burden of taxation from the wealthy (and corporations) to ‘regular folks’. Tax funded bailouts of corporations when profit driven risk threatens failure.
- Attack Solidarity (decrease unions)- Isolate workers, reduce unions, ‘at will employment’ and ‘right to work’. Promote an idea that workers are better off negotiating individually with employers. Trade no union dues for putting all the cards in the hands of the employers. Remind people they are ‘lucky’ to have a job at all, and the only way they have that job is if their employers got their taxes and costs reduced.
- Attack Solidarity (make workers compete with each other)- In addition to reducing unions, make workers compete against each other for wages, with those willing to accept the least getting the jobs. Make them suspicious of each other.
- Reduce sympathy for the less fortunate. Encourage people to look out only for themselves and ignore the needs of others to prevent common people from joining together to improve their democracy and economic status. Demonize groups (drug test welfare leeches, restrict immigrants, build walls).
- Limit means of advancement. Starve the public schools, cut vocation training, price college out of the range of many families.
- Corporations become global rather than national. Maximize profits, minimize expenses, outsource and reduce liabilities (people).
Current events demonstrate this concentration of wealth and power in action. The senate just approved the commercial production and sale of medical marijuana. When dispensaries first appeared in Michigan, they were supplied by countless small growers. Medication was purchased into inventory a few ounces or a pound at a time, and resold to carded patients at moderate cost. Competition decreased the price over time. MANY people benefited with minimal investment.
The new system is complex and multi leveled based on the Liquor Control Act. Extensive documentation and regulation was put into place, as were high liability insurance requirements and license fees, and new middlemen were created. Tax was charged. The cost of these new requirements will be passed on to the patients, and by my estimate the cost of medicine will probably double when all is said and done. But those higher charges will result in significant profits for those wealthy enough to hire the lawyers to jump through the hoops and pay the 6 figure start up costs. Those people in all likelihood will NOT be anyone reading this post. Those reading this post will be the ones paying the bills for those profits.
What Can We Do?
“What matters is the countless small deeds of unknown people who lay the basis for the significant events that enter history” Howard Zinn.
The answer to the is problem is not a single piece of legislation. When I was in Basic Training at Ft. Jackson, my brother wrote me a letter with a little advice. ‘Half the Victory in a Mind Game is Knowing you are in one…’.
By simply recognizing the game plan for Corporate America, and having a goal to improve the situation for the average working family at least we have a framework for action. Based on this article, I have an idea of some things we should accomplish.
Oppose legislation that decreases the bargaining position of employees
Make it more expensive (and not worth the cost) to outsource labor
Increase manufacturing jobs in Michigan
Oppose electric deregulation which turns electricity into a community rather than a product we create
Focus on small business that creates opportunity for many rather than big business enriching the few
This will be a slow process taking years to put people back in the economy. But at least by recognizing the games being played, we can evaluate economic legislation from the aspect of ‘who benefits from this law’. My goal for serving in Lansing will be to bring that benefit to families working for wages, not investors working for dividends.