Over the last few days, the protesters who ‘occupied’ Wall Street have triggered spontaneous ‘occupations’ in other cities across the country. The one that I saw in St. Louis last weekend looked a bit like a political rally for the Burning Man party. The fact that these protests have gathered a strangely dressed rabble has helped the right to discount them. Usually, right-wing media scoffers dismiss such protests by rhetorically asking, “Sure you’re against Wall Street, but you have no idea what Wall Street actually does, and you certainly aren’t presenting any kind of viable alternatives or policies.”
That, as Monty Python might’ve noted, isn’t an argument either.
Just because those protesters can’t present a viable alternative path into America’s future, doesn’t mean the path we’re on isn’t worth protesting.
The protesters’ inchoate frustration reflects the reality of American life for at least 80% of the U.S. population. They’re frustrated that they can’t afford medical insurance or that if they have it they can’t get the coverage they need or understand rules and billing procedures. They’re frustrated that they were scammed during the housing bubble; and that Wall Street salaries are back to exponential-increases-as-usual while real incomes are falling for the large majority of American families. They’re frustrated by relentless cuts to government programs that used to benefit most Americans, while funding for multiple wars continues unabated; one of them a war that was entered into under false pretenses, the other of which will leave Afghanistan every bit as unstable and potentially dangerous as it was back in the days when it was an Al Qaeda stronghold.
So are those protesters naive? Are they just a bunch of dreamers? They are and they were; the dream they had was The American Dream. And now they’ve woken up.
Think back to the days when The American Dream was a reality for most American families - the 1950s and ‘60s.
- Real wealth and purchasing power were increasing for most American families
- American public education worked
- Ordinary jobs allowed Americans to pay for homes and cars, and save for their futures
- American civil rights were codified
- Medicare and Social Security were signed into law
- Although less than half of the American workforce was unionized, 2/3‘s of the population thought trade unions were good for America
- U.S. stature in the world was increasing.
Throughout that period, the average American paid about twice as much income tax as he does now; peak tax rates for the rich exceeded 70%. In fairness, total government revenues represented the same share of GDP as the do now. IE, the total effective tax load was the same.
So what’s the difference? Well, the proportion of GDP spent on health care has doubled. Finance and Insurance account for a share of GDP twice as large as the did in those halcyon days. And the defense budget represents a larger share of GDP than it did even at the height of the nuclear buildup or Viet Nam. (The total defense budget has increased 10% per year every year for the last decade.)
Look: The economy is flat at best. If you take the fast-growing Medico-Insurance Complex out of the economy; if you take the fast-growing finance sector out; if you take out defense spending -- the rest of the economy is in fucking free fall, and we’re all falling with it.
So although those protesters can’t put it into words, the source of their frustration is in instinctive grasp of these simple facts:
We’re now spending vastly more on health care than any other nation -- in absolute and percentage terms -- and getting sicker and sicker. The only people this benefits are rich CEOs of hospitals and insurance companies, who can afford the Mayo Clinic.
The financial sector is twice the size it was back when America actually worked, and for all that growth we’ve had the internet bubble of 2000, the housing bubble, and insane stock market volatility. Whose benefitted? Merchant bankers who we bailed out, then stood by and watched as they got seven-figure bonuses.
And we’re no safer than before, American prestige is no better internationally -- probably worse. And all the actual, physical risk of projecting American power is taken by people who have, overwhelmingly, enlisted because they have no other viable work or educational opportunities.
Ranked by wealth, the bottom 80% of the American population is seeing an inexorable drop in their purchasing power, health, and security. People in the 80th-90th percentile are seeing drops, too, although they may be comfortable enough to remain in denial for a few more years. People in the 90th-99th percentile are seeing the sort of steady improvement in quality of life that all Americans saw during the ‘American Dream’ period. The top 1% of the population are doing extremely well and the top 1/10th of 1% -- the CEOs of those health care and finance companies, and defense contractors, are seeing an exponential growth in their wealth.
No wonder the protesters are frustrated and flabbergasted. You don’t need to have a viable alternative strategy to know that the one we’re pursuing isn’t working.
Some day in the future, economists, historians and even politicians are going to wake up to this truth: The health care sector of the economy is not actually inherently productive; it exists to keep workers (and their families) healthy and productive. The finance sector is not inherently productive; it exists to facilitate loans from people with capital to people with ideas and energy. The defense sector is not productive; it exists to protect Americans who are productive. If those sectors account for most economic activity, as the do now, the entire economy is built without a foundation.