The Eroding Middle Class
A commentary by the Publisher of FAIRisFAIR.org
Vol. I, Issue 5February 2005
I was watching Gosford Park the other day, and it was quite interesting. It wasn't just that the movie is an excellent period piece that captures the feel of early 20th century England or the dry humor of its setting, it was a reminder that the idea of a "middle class" is still a very new one.
Almost a hundred years ago, there was no such thing as a "middle class" – at least not like today. There was an upper class and a lower class and that was that. You were either a servant or an aristocrat. The middle class didn't really come into its own until the industrial revolution – when everyday workers became a factory necessity. The middle class exploded in the early part of the 20th century. A whole new generation of families emerged making a life for themselves – not one of fabulous wealth, but not one of poverty or servitude either. A new social class was created, one that spanned the previous two classes – and by uniting the two classes, it helped to unify society.
The baby boom of the 1950s helped further this middle class. Postwar GIs returned home, got a college education and made a comfortable life for themselves and their families. America has known this middle class for almost a century, but we're closer now to losing it than we have ever been before.
The Republicans control the three major branches of the federal government, and they owe it all to big business. But the payback for this sweep of power could crush the middle class. The favors seem innocuous enough, especially when they're spread out over several months – so it's easy to lose sight of how they all add up; so let me add them up for you.
First there's "bankruptcy reform." Powerful business interests have tried for years to eliminate the protections of bankruptcy law, to force everyday middle class people who are swept up by a cycle of misfortune to spend the rest of their lives making payments to these companies. These powerful agencies want to eliminate Chapter 7 bankruptcy protection1, where consumers suffering financial hardships can have their assets liquidated to pay their creditors what they can and then have all their debts wiped clean. The business interests don't want consumers to have this protection. They want to shackle the consumers to their debts, making them pay interest and fees well above the amount they originally borrowed. "Easy credit" may have helped create the middle class, but these usury practices will help end it.
Then there's the matter of privatizing Social Security and crippling Medicare. Americans have enjoyed these social safety nets for almost 75 years – but there's money to be made. Wall Street is just itching to get its hands on that Social Security money2 and the pharmaceutical industry doesn't want the federal government bargaining on the price of prescription drugs. Congressional Republicans have already paid back the pharmaceutical industry by blocking Medicare officials from bargaining for lower prices3. And Bush is leading an intensive lobbying effort to see to it that Social Security's revenue is taken out of stable government bonds and fed into the unpredictable stock market.
Finally there's federal taxes – some people just don't want to pay their fair share. Polluting business don't want to pay to clean up their messes. The wealthy don't want to pay capital gains on money made from money. And 63% of U.S. corporations don't pay any federal taxes4. Who pays for it all? It looks like America's economy is balanced on the back of the working people. The Bush administration keeps running up record deficits, leaving the final bill to our children. We could close the corporate tax loop holes, increase IRS enforcement on business tax evaders and restore funding for EPA's Superfund – but that would be going against the interests that put the Republicans in power.