Bob Herbert of The New York Times reviewed a new book which stresses that the growing divide between the rich and the poor is attributable to Washington politics over the past three decades. The authors of the book emphasize that there has been an organized political warfare to protect the interests of corporations and the wealthy, which has largely caused problems for the middle and lower classes. In sum, those with the most organized interests who monitored what government was doing on their behalf and brought pressure on politicians to protect those interests won over the majority. Thus, the hyper concentration of wealth, power and income is in the hands of those with political clout, which has drastically eroded economic opportunities for the middle class and working classes.
The book “Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class” by political scientists and authors Jacob Hacker (Yale) and Paul Pierson (University of California), traces the current economic struggles of the middle class since the 1970s and concludes it is the result of government initiatives that were prompted by corporate constituents that changed the distribution of wealth and economic opportunities in America. The book describes the changes that were made to redistribute wealth and income as an “organizational revolution” waged by big business and politicians of both parties with common interests.
The authors observe that these changes were made regardless of which political party held office. “Over the last generation,” the authors write, “more and more of the rewards of growth have gone to the rich and superrich. The rest of America, from the poor through the upper middle class, has fallen further and further behind.”
The authors cite hardships come from a long series of policy changes in government that unilaterally favor the rich. These changes run the gamut from tax laws to deregulation to corporate governance and safety net issues. Government actions allowed the very wealthy to amass an increasing share of the nation’s economic benefits.
The authors acknowledge that advancements in technology and the global economy have also affected our national economy over this same period. However, Professor Hacker said, “Much more important are the ways in which government has shaped the economy over this period through deregulation, through changes in industrial relations policies affecting labor unions, through corporate governance policies that have allowed C.E.O.’s to basically set their own pay, and so on.” Accordingly, the authors trace the decline of the middle class as an effective strategy over the last three decades when big business mobilized to become much more active in Washington.
The authors say the economic outcome is easy to understand when politics is viewed as “organized combat” with corporate giants cultivating politicians in both parties to achieve shared political goals at a time when organized labor, which had previously been the most effective force fighting on behalf of the middle class and other working Americans, was losing power.
Recently, David Cay Johnston, a Pulitzer Prize-winning former reporter for The New York Times, wrote that the incomes of the very highest earners in the United States, a small group of individuals hauling in more than $50 million annually (sometimes much more), increased fivefold from 2008 to 2009, even as the nation was being rocked by the worst economic downturn since the Great Depression.
Professors Hacker and Pierson note in their book that investors and executives at the nation’s 38 largest companies earned a stunning total of $140 billion — a record. The investment firm Goldman Sachs paid bonuses to its employees that averaged nearly $600,000 per person, its best year since it was founded in 1869. The authors have made it obvious that not everyone in America is not participating in the recession.
Candi Sparks is the author of the “Can I Have Some Money?” books series.
