Assault on the Middle Class

http://americawhatwentwrong.org/story/assault-middle-class/

By Donald L. Barlett and James B. Steele
Sunday, August 5th, 2012

This is the first of three excerpts from the "Betrayal of the American Dream," being co-published by the Investigative Reporting Workshop and the Philadelphia Inquirer.

"The Betrayal of the American Dream" is the story of how a small number of people in power have deliberately put in place policies that have enriched themselves while cutting the ground out from underneath America’s greatest asset — its middle class.

Their actions, going back more than three decades, have relegated untold numbers of American men and women to the economic scrap heap — to lives of reduced earnings, chronic job insecurity and a retirement with fewer and fewer benefits. Millions have lost their jobs. Others have lost their homes. Nearly all face an uncertain future.

Astonishingly, this has been carried out in what is considered the world’s greatest democracy, where the will of the people is supposed to prevail. It no longer does. America is now ruled by the few — the wealthy and the powerful who have become this country’s ruling class.

This book tells how this has happened, who engineered the policies that are crippling the middle class, what the consequences will be if we fail to reverse course and what must be done to restore the promise of the American dream.

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And the worst is yet to come, as the privileged and their associates in Congress prepare to initiate slash-and-burn policies, beginning in 2013, to balance the budget — largely on the backs of the working middle class. That’s when people will learn that they are expected to work until at least the age of 70, assuming that they can find employers willing to hire them at that age and that they are healthy enough to handle full-time employment. At the same time that the government is requiring people to work until they are 70 before retirement benefits are available to them, for most working people, 50 is all too often the new 65 when it comes to employment opportunities for anyone who wants to do anything other than become a greeter at Walmart.

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For decades, Washington and Wall Street have been systematically rewriting the rules of the American economy to benefit the few at the expense of the many — putting in place policies that have steadily dismantled the foundation of America’s middle class.

The financial deregulation that enriched Wall Street and triggered the Great Recession was just the latest in a long series of moves by the economic elite to consolidate their control of the American economy. They have:

• Created a tax system that is heavily weighted against the middle class

• Deregulated sectors of the economy, and in so doing, killed jobs or lowered wages for employees across entire industries, such as airlines and trucking

• Ignited in the financial sector a wildly speculative run-up in mortgage-backed securities of little value that imploded in the 2008–2009 recession

• Encouraged corporations to transfer jobs abroad and eliminate jobs in this country to bolster the value of stock, increase dividends and boost executive compensation

• Enabled companies to eliminate positions and replace permanent employees with contract workers at lower pay and with no benefits

• Allowed multinational corporations to shelter profits overseas and avoid paying taxes on earnings that could be used to help stimulate jobs at home

• Forced 11 million people with mortgages that exceed the value of their homes to make monthly payments to the banks that caused the housing collapse — a debt they will never be able to pay off

• Refused to support the growth of new industries that could generate jobs for the future

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These figures will take on new meaning in 2013, when Congress begins to mindlessly — and needlessly — wield a meat axe to government spending. Not that spending should be allowed to continue unchecked. There are many areas where it should be reduced. But the spending that should be curbed won’t be. Rather, lawmakers will pretend, as they have for several years, that spending must be slashed to bring down the deficit. Even Social Security will be on the chopping block. So, too, health care. What they really mean is the ruling class is getting ready to squeeze working people even more.