Screwed: The Undeclared War Against the Middle Class -- And What We Can Do About It - Couverture souple

Profits before People

THE STORY OF CARL

Carl loved books and he loved history. After spending two years in the army as part of the American occupation forces in Japan immediately after World War II, Carl was hoping to graduate from college and teach history—perhaps even at the university level—if he could hang on to the GI Bill and his day job long enough to get his PhD. But in 1950, when he’d been married just a few months, the surprise came that forced him to drop out of college: his wife was pregnant with their first child.

This was an era when husbands worked, wives tended the home, and being a good father and provider was one of the highest callings to which a man could aspire. Carl dropped out of school, kept his 9-to-5 job at a camera shop, and got a second job at a metal fabricating plant, working with molten metal from 7:00 p.m. to 4:00 a.m. For much of his wife’s pregnancy and his newborn son’s first year, he slept three hours a night and caught up on the weekends, but in the process he earned enough to get them an apartment and prepare for the costs of raising a family. Over the next forty-five years, he continued to work in the steel and machine industry, in the later years as a bookkeeper/manager for a Michigan tool-and-die company as three more sons were born.

Carl knew he was doing the right thing when he took that job in the factory, and he did it enthusiastically. Because the auto industry was unionized, he found he was able to support his entire family—all four sons—on one paycheck. He had fully funded health insurance, an annual vacation, and a good pension waiting for him when he retired. Carl had become a member of the middle class. He may not have achieved his personal dream of teaching history, but he had achieved the American dream. He was self-sufficient and free.

Working with molten metal could be dangerous, but the dangers were apparent, and Carl took every precaution to protect himself so that he could return home safe to his family. What he didn’t realize, however, was that the asbestos used at the casting operation was an insidious poison. He didn’t realize that the asbestos industry had known for decades that the stuff could kill but would continue to profitably market it for another twenty years while actively using its financial muscle to keep the general public in the dark and prevent the government from interfering.

A couple of years ago, Carl tripped on the stairs and ended up in the hospital with a compression fracture of his spine. He figured that fall also caused the terrible pain he’d been experiencing in his abdomen. The doctors, however, discovered that his lungs were filled with mesothelioma, a rare form of lung cancer that is almost always caused by exposure to asbestos. Mesothelioma is terminal, and its victims die by slow and painful suffocation.

Just because some corporation put profit before people, Carl got screwed.

I was Carl’s first child.

AN UNDECLARED WAR

My dad faced a painful death, but at least his job in a union shop left him with health care after retirement. Most Americans don’t even have that reassurance anymore. More than 45 million Americans don’t have health insurance to cover expenses for a serious illness; 5 million have lost their health insurance in the past four years alone. And it’s not just illness that worries most Americans today. Americans are working more and making less. It’s getting harder and harder to just get by.

There’s a reason for the pain Americans are suffering.

The America my dad grew up in put people before profits. The America he lives in now puts profits before people.

In my dad’s America, 35 percent of working people were union members who got a living wage, health insurance, and defined-benefits pensions. These union benefits lifted all boats because they set the floor for employment; for every union job, there was typically a nonunion job with similar pay and benefits (meaning roughly 70 percent of the American workforce back then could raise a family on a single paycheck). People who were disabled and couldn’t work could live on Social Security payments, and the elderly knew they would have a safe retirement, paid for by pensions, Social Security, and Medicare. The gap between the richest and the poorest shrunk rather than widened.

That America is disappearing fast. The minimum wage—just $5.15 per hour—is not a living wage. Workers are now expected to pay for their own health insurance and their own retirement. Pension plans are disappearing—30,000 General Motors employees lost theirs in 2005—and there’s continued talk of privatizing Social Security. The safety net is ripping apart, and the results are that the middle class is shrinking. The rich are once again getting richer, and the poor are getting poorer:

Image The inflation-adjusted average annual pay of a CEO went up from $7,773,000 to $9,600,000 from 2002 to 2004. Meanwhile, from 2000 to 2004, the inflation-adjusted median annual household income went down from $46,058 to $44,389. In other words, ordinary people’s income went down by $1,669 while CEO pay went up by $1,827,000.1

Image Over the past four years, from 2001 to 2005, America has lost 2,818,000 manufacturing jobs. If you don’t count jobs produced by the military-industrial complex, the number of private sector jobs created since 2001 has decreased by 1,160,000.2

Image Although 67 percent of large employers (more than 500 employees) offer a traditional pension, that is down from 91 percent two decades ago, and it’s dropping fast as more companies freeze pensions and turn instead to 401(k)s.3 Only 6 percent of Americans working in the private sector can rely on a defined pension,4 and 76 percent of Baby Boomers say they don’t think they are very prepared to meet their retirement expenses.5

Image Today only 60 percent of employers provide health care to their employees. More than 45 million Americans were without health insurance as of 2004, and we can only guess that that number has grown.6

You don’t need the numbers because you probably already know someone who has been forced out of the middle class. Roger, for instance, who once was a vice president of research and development for a software engineering company, lost his job during the dot-com bust and never got it back. After being unemployed for seven years, he’s thinking of getting a job as a “landscape engineer"—that’s a gardener—at a tenth of his former salary.

Or there’s the case of Bob, a college graduate who has been holding three jobs for the past five years, one full-time as a bookstore clerk, two part-time. Even though he works sixty hours a week, he doesn’t make enough money to rent his own apartment (he rents a room in a shared flat) and he can’t afford health insurance. He hopes his allergies don’t turn into asthma because he can’t afford the medication he would need for that.

Too many Americans are just holding on. Consider Amy: Divorced from her alcoholic husband, she has gone back to school full-time to become a teacher; she earns a living by catering on the weekends. A single mother, she and her daughter share a studio apartment. Amy has neither health insurance nor child care and no nearby relatives—she relies on neighbors to take care of her daughter. One major illness and Amy would be homeless.

And then there are most of the rest of us, who have good jobs but still don’t feel secure about the future. Ralph and Sally both get health insurance through their jobs, but their mortgage eats up more than 60 percent of their income, and the clothes and the necessities they buy for their two kids consume whatever might be left after groceries and utilities. They have health insurance but no pension. Their retirement is based on the few thousand dollars a year they can put into their IRAs. They wonder how they will be able to send their kids to college and afford to retire.

Today a man like my dad couldn’t support a family of six on one paycheck. The middle class my dad belonged to is on its deathbed. Meanwhile, sitting around the pool, waiting for the dividend checks to roll in (while paying a maximum 15 percent income tax), the corporate class grows even wealthier.

How can this be?

How is it that companies could sell asbestos when they knew it would kill people? Why do people go hungry in America, the world’s wealthiest nation? Why is it that people like you and me who work long, full days cannot afford to get sick, cannot buy houses, and cannot send their kids to college? What’s happened to the middle class?

These questions are about our economy, but the answer is about who we are as a country.

DEMOCRACY AND THE MIDDLE CLASS

The most ancient form of democracy is found among virtually all indigenous peoples of the world. It’s the way humans have lived for more than 150,000 years. There are no rich and no poor among most tribal people—everybody is “middle class.” There is also little hierarchy. The concept of “chief” is one that Europeans brought with them to America—which in large part is what produced so much confusion in the 1600s and 1700s in America as most Native American tribes would never delegate absolute authority to any one person to sign a treaty. Instead decisions were made by consensus in these most ancient cauldrons of democracy.

The Founders of this nation, and the Framers of our Constitution, were heavily influenced and inspired by the democracy they saw all around them. Much of the U.S. Constitution is based on the Iroquois Confederacy—the five (later six) tribes who occupied territories from New England to the edge of the Midwest. It was a democracy with elected representatives, an upper and lower house, and a supreme court (made up entirely of women, who held final say in five of the six tribes).

As Benjamin Franklin noted to his contemporaries at the Constitutional Convention: “It would be a very strange thing if Six Nations of Ignorant Savages should be capable of forming a Scheme for such an Union and be able to execute it in such a manner, as that it has subsisted Ages, and appears indissoluble, and yet a like union should be impracticable for ten or a dozen English colonies.”

The Framers modeled the oldest democracies, and the oldest forms of the middle class, and thus helped create the truly widespread and strong first middle class in the history of modern civilization.

Back in Europe, however, the sort of democracy the Framers were borrowing and inventing, and even the existence of a middle class itself, was considered unnatural. For most of the seven thousand years of recorded human history, all the way back to the Gilgamesh Epic, the oldest written story, what we call a middle class is virtually unheard of—as was democracy. Throughout most of the history of what we call civilization, an unrestrained economy and the idea of hierarchical social organization has always produced a small ruling elite and a large number of nearly impoverished workers.

Up until the founding of America, the middle class was considered unnatural by many political philosophers. Thomas Hobbes wrote in his 1651 magnum opus Leviathan that the world was better off with the rule of the few over the many, even if that meant that the many were impoverished. Without a strong and iron-fisted ruler, Hobbes wrote, there would be “no place for industry . . . no arts, no letters, no society.” Because Hobbes believed that ordinary people couldn’t govern themselves, he believed that most people would be happy to exchange personal freedom and economic opportunity for the ability to live in safety and security. For the working class to have both freedom and security, Hobbes suggested, was impossible.

Our nation’s Founders disagreed. They believed in the rights of ordinary people to self-determination, so they created a form of government where We the People rule. They declared that all people, and not just the elite, have the right to “life, liberty, and the pursuit of happiness.” (In that declaration, Thomas Jefferson replaced John Locke’s famous “life, liberty, and property” with “life, liberty, and happiness"—the first time the word had ever appeared in the founding document of any nation.) They believed that We the People could create a country founded on personal freedom and economic opportunity for all. The Founders believed in the power of a middle class; and in defiance of Hobbes and the conventional wisdom of Europe, they believed that democracy and a middle class were the “natural state of man.”

As John Quincy Adams argued before the Supreme Court in 1841 on behalf of freeing rebelling slaves in the Amistad case, he stood before and pointed to a copy of the Declaration of Independence:

That DECLARATION says that every man is “endowed by his Creator with certain inalienable rights,” and that “among these are life, liberty, and the pursuit of happiness.” . . . I will not here discuss the right or the rights of slavery, but I say that the doctrine of Hobbes, that War is the natural state of man, has for ages been exploded, as equally disclaimed and rejected by the philosopher and the Christian. That it is utterly incompatible with any theory of human rights, and especially with the rights which the Declaration of Independence proclaims as self-evident truths.

It turns out that the Founders knew something Hobbes didn’t know: political democracy and an economic middle class is the natural state of humankind. Indeed, it’s the natural state of the entire animal kingdom.

For example, biologists used to think that animal societies were ruled by alpha males. Recent studies, however, have found that while it’s true that alpha males (and females, in some species) have the advantage in courtship rituals, that’s where their power ends. Biologists Tim Roper and L. Conradt discovered that animals don’t follow a leader but instead move together.7

James Randerson did a follow-up study with red deer to prove the point.8 How does a herd of deer decide it’s time to stop grazing and go toward the watering hole? As they’re grazing, various deer point their bodies in seemingly random directions, until it comes time to go drink. Then individuals begin to graze while facing one of several watering holes. When a majority of deer are pointing toward one particular watering hole, they all move in that direction. Randerson saw instances where the alpha deer was actually one of the last to move toward the hole rather than one of the first.

When I interviewed Tim Roper about his research at the University of Sussex in the United Kingdom, he told me that when his findings were first published, scientists from all over the world called to tell him that they were seeing the same thing with their research subjects. Birds flying in flocks aren’t following a leader but monitoring the motions of those around them for variations in the flight path; when more than 50 percent have moved in a particular direction—even if it’s only a quarter-inch in one direction or another—the entire flock “suddenly” veers off that way. It’s the same with fish and even with swarms of gnats. Roper said that his colleagues were telling him that from ants to gorillas, democracy is the norm among animals. Just like with indigenous human societies—which have had hundreds of thousands of years of trial and error to work out the best ways to live—democracy is the norm among animals, and (other than for the Darwinian purpose of finding the best mate) hierarchy/kingdom is the rarity.

Thus, we discover, this close relationship between the middle class and democracy is burned into our DNA—along with that of the entire animal kingdom (an ironic term, given this new informa...

“I think many of us recognize that for all but the wealthiest, life in America is getting increasingly hard. Screwed explores why, showing how this is no accidental process, but rather the product of conscious political choices, choices we can change with enough courage and commitment. Like all of Thom’s great work, it helps show us the way forward.”
—Paul Loeb, author of Soul of a Citizen and The Impossible Will Take a Little While

“Once again, Thom Hartmann hits the bull’s eye with a much needed exposé of the so-called ‘free market.’ Anyone concerned about the future of our nation needs to read Screwed now.”
—Michael Toms, Founding President, New Dimensions World Broadcasting Network and author of A Time For Choices: Deep Dialogues for Deep Democracy

“If we are going to live in a Democracy, we need to have a healthy middle class.  Thom Hartmann shows us how the ‘cons’ have wronged this country, and tells us what needs to be done to reclaim what it is to be American.”
— Eric Utne, Founder, Utne magazine

“Thom Hartmann’s book explains in simple language and with concrete research the details of the Neo-con’s war against the American middle class. It proves what many have intuited and serves to remind us that without a healthy, employed, and vital middle class, America is no more than the richest Third World country on the planet.”
— Peter Coyote, Actor and author of Sleeping Where I Fall

“The powers that be are running roughshod over the powers that OUGHT to be. Hartmann tells us what went wrong — and what you and I can do to help set American right again.”
—Jim Hightower, National Radio Commentator, Writer, Public Speaker, and author of the bestselling Thieves in High Places

“Hartmann speaks with the straight talking clarity and brilliance of a modern day Tom Paine as he exposes the intentional and systematic destruction of America’s middle class by an alliance of political con artists and outlines a program to restore it. This is Hartmann at his best. Essential reading for those interested in restoring the institution that made America the envy of the world.”
— David C. Korten, author of The Great Turning and When Corporations Rule the World